Less than 4 years ago, and shortly after his infamous “whatever it takes” threat to speculators, Mario Draghi responded to a question from Zero Hedge readers, saying “there is no Plan B” when it comes to contingency plans for a Eurozone nation leaving the monetary union. The reasoning was simple: the mere contemplation of such a scenario assigned a probability to its occurrence, which is why the ECB was desperate to give the impression that no matter what, Europe’s cohesion is unbreakable.
Fast forward four years later, when not only has this particular strategy been thoroughly rejected, but for the first time ever the head of the ECB provided a framework, vague as it may be, laying out what a Eurozone exit would look like.
In a letter to two Italian lawmakers in the European Parliament released on Friday, and first reported by Reuters, Mario Draghi implied that a country could leave the euro zone – so much for “No Plan B” – but first it would need to settle or debts with the bloc’s TARGET2 payments system before severing ties.
Read moreIn Stunning Admission, Draghi Says A Country Can Leave Eurozone But Must “Settle Bill First”