Cyprus Shows Trust in ECB Is Misplaced
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March 25 (Bloomberg) -- Ever since European Central BankPresident Mario Draghi said last July that the bank will dowhatever it takes to preserve the euro, complacency has pervadedEurope’s single-currency area. Markets have weathered potentialcrises in Italy and Spain with surprising calm, secure in theknowledge that the ECB will save the day if needed.
This was always a false assumption, as events in Cyprushave made clear. There are significant limitations to thesupport the ECB is willing or able to offer, even to such a tinyisland economy whose needs are easily affordable.