Thursday, July 26, 2012

Draghi: "Whatever It Takes"

After his Le Monde interview the other day, Mario Draghi is back, this time speaking to the Global Investment Conference in London, where he said that the ECB will do "whatever it takes" to preserve the euro:
«All'interno del proprio mandato, la Bce è pronta a fare qualunque cosa per preservare l'euro, e credetemi, questo basterà».
And his words were not without effect: spreads on Italian and Spanish bonds immediately decreased. Perhaps investors missed the phrase "within its mandate." German public sentiment has rapidly hardened against "doing whatever it takes," and it remains to be seen how free a hand Draghi actually has. The speech received a lot of play in Italy (which is why I'm quoting from the Corriere della sera) but none at all in France. The imminence of doom has apparently sharpened Italy's focus. France is still preoccupied with internal problems.

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