Draghi Mythology and Eurozone Debt Costs

What did European Central Bank President Mario Draghi achieve when he promised a year ago to do “whatever it takes” to save the euro? Back then, the yields on ten-year Italian and Spanish government bonds were around 7 percent, more than 5 percent higher than ten-year German bunds. Draghi warned about fragmenting markets and announced so-called open market transactions to buy peripheral government bonds if necessary.

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