10 years after “whatever it takes”: fragmentation risk in the current context

On 26 July 2012, then ECB President Mario Draghi gave the so-called “whatever it takes” speech, today widely considered as the turnaround point in the European sovereign debt crisis. Shortly after, the European Central Bank (ECB) announced the details of its outright monetary transactions programme (OMT) tool. The speech, together with the OMT announcement, were enough to remove re-denomination risk from sovereign bond markets. OMT was never actually used. 10 years after, in a context of record-high inflation, fragmentation risk has emerged once again as a central issue for monetary policy in the euro area. Four papers were prepared by the ECON Committee’s Monetary Expert Panel, looking into the recent re-emergence of fragmentation risk in the euro area. This publication is provided by Policy Department A for the Committee on Economic and Monetary Affairs (ECON), ahead of the Monetary Dialogue with ECB President Lagarde on 20 June 2022.