March 25 (Bloomberg) -- Ever since European Central Bank
President Mario Draghi said last July that the bank will do
whatever it takes to preserve the euro, complacency has pervaded
Europe’s single-currency area. Markets have weathered potential
crises in Italy and Spain with surprising calm, secure in the
knowledge that the ECB will save the day if needed.
This was always a false assumption, as events in Cyprus
have made clear. There are significant limitations to the
support the ECB is willing or able to offer, even to such a tiny
island economy whose needs are easily affordable.