Europe's financial crisis: Waiting for ECB to ride to the rescue
European Central Bank president Mario Draghi will lay out a plan Thursday on how the continental bank will address current fiscal issues.
In this Aug. 2 file photo, President of European Central Bank Mario Draghi addresses the media during a news conference in Frankfurt, Germany.
Michael Probst/AP/File
Frankfurt, Germany
European Central bank President Mario Draghi gets another chance Thursday to spell out how the bank intends to rescue the 17 countries that use the euro from financial disaster.
Expectations have been high since late July when the ECB head vowed to do "whatever it takes" to hold the eurozone together. The following week, on Aug. 2, Draghi announced the broad outlines of a plan to buy government bonds to help out eurozone countries struggling to manage their debt.
Until then, countries such as Spain and Italy had seen their borrowing costs — reflected in the interest rates on bonds they sell — rise to unmanageable levels. Investors were worried the two countries could soon get to a point where they couldn't afford to handle their finances and be pushed into asking for a bailout.
That has already happened three times in the eurozone — with Greece, Ireland and Portugal. The worry is that Spain and Italy are too big to bail out. If those countries fail to pay their debts on time, it could spark a financial crisis that could see the eurozone break up, spreading turmoil throughout the global economy.
Analysts say Draghi's comments Thursday are likely to be constrained by the fact that the ECB is still working on its plans. The ECB chief has to strike a delicate balance: promise and reveal enough to keep markets happy, while nudging Europe's politicians to do more.
Here is a look at what Draghi and the ECB have been working on and what to look out for on Thursday:
—BOND-BUYING STRATEGIES:
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