Eurozone economists who have spent the past week dusting off their debt-sustainability models for Italy are feeling a slight sense of déjà vu. “All of a sudden, everyone has to have an opinion on Italian debt yields,” said Gilles Moec, chief economist at French insurer Axa. “It reminds me of 2012.”
In an echo of the eurozone debt crisis that erupted 10 years ago, the European Central Bank said on Wednesday it was again preparing to launch a new bond-buying scheme to contain a sovereign debt sell-off that has hit more vulnerable countries such as Italy much harder than more stable ones such as Germany.
However, there are important differences between now and then — when the ECB slashed interest rates and started buying huge amounts of bonds to tame a debt crisis that threatened to tear the eurozone apart.