and therefore has no backstop defence for its commercial banking system.
The European Central Bank is progressively removing its shield as quantitative easing is wound down and purchases of Italian bonds fall to zero.
There will be no protection by the end of the year. The Draghi pledge to do “whatever it takes” no longer holds.
No future rescue by the ECB is possible unless the Italian government of the day – endorsed by parliament – formally invokes the bail-out mechanisms (OMT-ESM) and accepts austerity imposed by Brussels.