Commenting on Mario Draghi's statements on the euro, Philip Booth, Editorial and Programme Director at the Institute of Economic Affairs, said:
“The ECB is burying its head in the sand in the latest pledges to support the euro. Instead, it should be contemplating the orderly end of the euro as a single currency across the eurozone and - where necessary - an orderly default on EU government debt.
"The head of the ECB has said that he will do 'whatever it takes' within the ECB's mandate to preserve the euro and that high yields on some government bonds were 'unacceptable'. The ECB appears to want to effectively underwrite the government debt of highly indebted nations by printing money. This policy can only succeed in its own terms if the action is substantial enough to create enormous inflation in the indebted countries. If this happens, the euro as a sound, non-inflationary currency is dead and bond yields throughout the eurozone will be on the rise again."
Notes to editors:
To arrange an interview with an IEA spokesperson, please contact Stephanie Lis, Communications Officer on 020 7799 8909 or 07766 221 268.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.