A remark by Christine Lagarde on Italy sparked protests and pushed bond yields higher.
Could this already be the real end of the “Draghi era”, that of peaceful relations between Italy and Europe? After a few weeks of controlled discourse with regard to the European Union, the government of Giorgia Meloni is attacking the European Central Bank (ECB) head-on. The rise in rates to 2% to counter inflation, the announcement of future increases and the decision to halve the purchases of Treasury bills by the ECB as of March triggered a storm on the markets.
For Italy, the ten-year rate climbed to 4.4% on Friday, even exceeding the Greek rate. And the gap with the German rate, the “spread”, has suddenly widened, from 180 to 220 basis points. A reaction very badly experienced by the Italians. It was enough for Christine Lagarde, the President of the ECB to say, on Thursday, “hope that Italy quickly ratifies the ESM rescue fund”, pointing “the last European country not to have done so”, so that Rome feels directly targeted by the…
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