The writer is a senior fellow at Harvard Kennedy School and chief economist at Kroll
It has been 10 years since then European Central Bank president Mario Draghi made his famous promise to do “whatever it takes” to hold the eurozone together. How ironic that the same man is now at the helm of the country that might just bring the currency union back into crisis.
Italian 10-year government bond yields jumped after the ECB announced it would end its bond-buying programme by July, and then consider raising interest rates. The spread to German Bund yields, a chief measure of financial stress in Europe, reached its widest since 2013. ECB officials calmed markets by holding a crisis meeting to announce they will create an anti-fragmentation tool that works better than the two it already has. Unfortunately for Italy, and the eurozone, the third time may not be the charm.