The Corona Test For The Euro Zone

COVID-19 will test the new financial architecture of the euro zone. Since the euro crisis, new instruments have been developed, such as the European Stability Mechanism (ESM) and the ECB’s Outright Monetary Transactions (OMT). OMT being the bazooka the ECB created, but never needed to use, after Mario Draghi in 2012 pledged to do “Whatever it takes to save the euro”. The question now is whether policymakers are willing to use them.

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