Draghi sees writing on the wall for EU breakup, but makes desperate call for nations not to pull an Iceland on their debt

As thousands of $40 hot dog eaters in Davos, Switzerland discuss how they should deal with the rise of global populist movements, one central banker shockingly has thrown up his hands in surrender and appears ready to face the inevitability of an EU breakup.

On Jan. 20, European Central Bank chief Mario Draghi wrote in a letter to two parliamentarians in Italy that it was alright to leave the European Union, as long as they settled up their debts with the central bank.

In a letter to two Italian lawmakers in the European Parliament released on Friday, and first reported by Reuters, Mario Draghi implied that a country could leave the euro zone - so much for “No Plan B” - but first it would need to settle or debts with the bloc’s TARGET2 payments system before severing ties.

”If a country were to leave the Eurosystem, its national central bank’s claims on or liabilities to the ECB would need to be settled in full,” Draghi said in the letter.

As Reuters confirms, the comment by Draghi is “a rare reference by Draghi to the possibility of the currency zone losing members.” We would say not just “reference” but admission that a Italexit is all too possible, however the only way the ECB would allow it, would be for Italy first to pay its €357 billion TARGET2 bill (which various confused and clueless tenured economists over the past five years claimed would never be used by the ECB as a bargaining chip in “exit” negotiations and has no political implications; oops).

— Zerohedge

The ironic thing is, nearly all sovereign debt held by EU countries, especially those in Southern Europe or within the PIIGS coalition, could very easily be designated as onerous debt, and not subject to lawful collection by the ECB.  And this is exactly what Iceland claimed when they defaulted on their EU debts and went their own way back in 2009.

Additionally, it is also extremely interesting in how Mario Draghi all of a sudden is willing to give up on the fight to force nations to remain within the EU, since he spent years engaged via the Troika in subjugating these same countries with austerity and forced sales of assets.

More and more, analysts and even politicians are coming to realize that the Euro and EU's days are numbered, and that their gravy train of wealth confiscation is quickly coming to an end as the people rise up to demand satisfaction for the sins of their governments.  And if ECB head Mario Draghi is willing to throw away one of his biggest negotiating chips in a desperate attempt to get nations on the cusp of leaving the EU to pay their suffocating debts to him before they exit, then even the elites know the writing is on the wall, and the floodgates should soon open wide for a full blown exit from the Union.