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Draghi condemns inaction by eurozone leaders

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Draghi condemns inaction by eurozone leaders


European Central Bank chief Mario Draghi has turned the heat up on eurozone policymakers, urging them to implement measures to resolve the single currency bloc’s debt crisis.

In a hardhitting speech he said failure to beef up the EFSF bailout fund was putting the bank’s credibility at risk. He said: “We are four months after the summit which decided to make the full EFSF guarantee volume available and we are four weeks after the summit that agreed on leveraging of the resources by a factor of up to four or five and that declared the EFSF would be fully operational. Where is the implementation of these long-standing decisions?”

His comments are likely to fuel debate among European leaders on the ECB’s role in tackling the debt problem. It has intervened to buy Spanish and Italian bonds to keep those country’s debt levels sustainable.

The bank’s programme of bond-buying has increased steadily since July and it is this rising line that is worrying some in the eurozone, particularly Germany, which is strongly opposed to the ECB becoming the lender of last resort.

But many investors, inside and outside the eurozone, believe large scale intervention on a sustained basis is the only thing that will resolve the crisis.

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