Europe’s bond minefield

The European Central Bank's bond-buying plan has cheered markets. But how will the Bank ensure bailed out countries stick to the rules?

Eurozone policymakers have had a good few weeks for once. European Central Bank (ECB) president Mario Draghi impressed markets with his bond-buying programme. Germany's constitutional court approved the eurozone's permanent rescue fund. And Dutch voters turned away from eurosceptic parties in their general election.

But it is dawning on initially euphoric investors that while the "tail-risk of sovereign defaults in Italy and Spain" should now be "off the table", as Ambrose Evans-Pritchard puts it in The Daily Telegraph, the ECB plan is a palliative rather than a cure. A series of problems, both old and new, remain. That's why the yield on Spanish ten-year government debt has begun to climb again as prices have fallen.

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