Yanis Varoufakis

Further to my previous post on Mr Draghi’s recent undermining of the Office of ECB President, Gavyn Davies of the FT penned the following line: “It is risky for a central banker to acknowledge that the payments system on which the currency stands may not be fully credible. Mr Draghi could simply have repeated the old line that the operation of the Target 2 system is enough to ensure that the euro can never fall apart. By admitting the reality that the system is no longer 100 per cent credible in the eyes of the market, the ECB president has invited investors to ask whether his proposed interventions are powerful enough to deal with problem he has raised.” And, as I have argued, investors will inevitably come to the conclusion that they are nowhere near powerful enough. Put simply, the policy of having the EFSF-ESM use its severely circumscribed fire…

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