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At the core of this “recovery†is a bluff that has yet to be called. In August last year, the European Central Bank’s president, Mario Draghi, promised to do “whatever it takes†to defend the euro through the unlimited purchase of bonds issued by troubled EU states. It was high-quality legerdemain. Presented with the perceived safety net of a one-way bet, private investors returned to buying sovereign debt and company shares in the EU’s angst-ridden periphery.
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