Matthew C Klein, Columnist

Germany's New Euro-Haters Threaten Draghi's Dream

Sovereign borrowing costs in Italy and Spain have plunged across the curve.Â Yet none of this translated into an economic recovery.Â

March 12, 2013 at 6:58 PM UTC

By Matthew C Klein

Matthew C. Klein writes for Bloomberg View about the economy and financial markets. He previously wrote for the Economist magazine and its economics blog, Free Exchange. Before that, Klein was a research associate at the Council on Foreign Relations, where he spent more than two years studying the history of the Federal Reserve and the intellectual history of monetary economics for an upcoming book by Sebastian Mallaby. He also worked at Bridgewater Associates, where he studied the economies of Central and Eastern Europe and advised institutional investors on asset-liability management. Klein has a bachelor's degree in history from Yale University. Originally from Chicago, he lives in New York.

Provide news feedback or report an error

Site feedback:

Take our Survey

This article is for subscribers only.

Last summer, Mario Draghi, the president of the European Central Bank, declared that he would do "whatever it takes" to preserve the euro. We may soon find out just how much his word is worth.

On the surface, things have gone well since Draghi's speech at the end of July. Sovereign borrowing costs in Italy and Spain have plunged across the curve. After fleeing for more than a year, depositors have started returning to Spain, albeit tepidly. The IBEX 35 Index has soared by 44 percent, and Italy's benchmark index, the FTSE MIB, has gained more than 30 percent.