Patrick Kaczmarczyk
Amid the market turmoil in March 2020, the president of the European Central Bank, Christine Lagarde, said the bank was ‘not here to close spreads’ only to do a subsequent U-turn, announcing that it remained ‘fully committed to avoid[ing] any fragmentation’ in bond markets. The selling of Italian and other southern-European bonds which followed Lagarde’s initial remark undoubtedly showed her how dangerous such comments can be, especially in a market environment of uncertainty and stress.
Despite an echo here of her predecessor Mario Draghi’s 2012 ‘whatever it takes’ declaration this time expressed as ‘no limits to [the] commitment to the euro’ the question remains as to how determined the ECB will be, and for how long, to avoid centrifugal forces in the eurozone taking over again in the future, not least after the judgment of the German constitutional court in May 2020 insisting that it justify its bond-buying programme. Yet there is surprisi