The affable and unelected chief banker has found himself in the midst of what has become not just an economic crisis, but a widening political crisis over whether Europe, the EU, and the eurozone can hang together.
Yet the summer has been a somewhat tranquil period here with fewer euro crisis headlines, and the ECB would like to keep it that way, even as Greece and Spain face high unemployment and drastically reduced government spending.
Draghi repeated nearly verbatim his now famous statement from last summer that “we will do whatever it takes, within our mandate to… preserve the euro… we say the euro is irreversible.”
The ECB’s direction under Draghi has been contested around Europe, mainly from northern states and Germany, where recent polls showed his unpopularity rating at 42 percent.
Yet in a nod to Germany, which fears the ECB will become an irresponsible money printing machine, the buying of one- to three-year bonds will be tied to what Draghi stressed as the linchpin of the plan: "conditionality." Draghi said the bond plan is a “fully effective backstop” – provided nations live up to the terms of the deal he stated.
That “most of the ECB is supporting this is positive, and it isolates Germany further,” says Simon Tilford, chief economist of the Center for European Reform in London. “But there are fears that the conditions attached to the bond buying will make it impossible [for debtor nations] to meet the terms. Tighter demands for austerity at a time of high unemployment may not be possible.”