As we argued in the past Draghi's assumption is based on the so called "Maradona theory ", first introduced by the Bank of England's King, who based the Maradona theory on a goal scored by Argentine soccer star Diego Maradona at the 1986 World Cup in Mexico. Maradona dodged five players in a 60-yard dash from his own half of the field to score to secure Argentina’s victory over England.
“The truly remarkable thing, however, is that Maradona ran virtually in a straight line,” King said in a 2005 lecture. “How can you beat five players by running in a straight line? The answer is that the English defenders reacted to what they expected Maradona to do. Because they expected Maradona to move either left or right, he was able to go straight on. Monetary policy works in a similar way. Market interest rates react to what the central bank is expected to do.”
Therefore Draghi's assumption will work as long as none of the defenders will move to the center or referring to the European scene as long as no-one of the countries will decide to go back to its national currency.
With the European currency trading at 1.3091$ versus the greenback today, we cannot say that the "Maradona Theory" didn't work, indeed it was so successful that the (new) elected Italian President employed it.
In effect, if you think about the birth of the new Italian government, you will find similarities:
Letta's government has been designed on the assumption that no-one of the parties of " the great coalition" will decide to pull the plug.
Why?
Because in this case Italy would find itself without the President and without the Government.
Therefore, Napolitano's assumption will work as long as none of the defenders will move to the center or referring to the Italian political scene, as long as no one of the the political party will pull the plug.
Hence my question: are these assumptions strong enough to sustain the European, the Italian framework?
