ECB President Mario Draghi avoided a financial contagion last year, promising to do “whatever it takes” to defend the euro, but analysts say the policymaker also thereby created the very conditions that led to Italy’s leadership vacuum.
This is the Catch-22 for Draghi, says Ed Yardeni of Yardeni Research.
After his headline-making promise to defend the euro, government bond yields dropped sharply in troubled euro zone countries. The Italians had faced real pressure during 2011, as the 10-year yield rose to a peak of 7.29 percent during November 25 of that year.
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