Draghi's vow to save the eurozone criticised

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Draghi's vow to save the eurozone criticised

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European Central Bank Chief Mario Draghi can certainly move the markets – more than six percent higher in the case of Spain on Thursday. But his vow to save the eurozone has been criticised as a short-term “bluff”.

Draghi told an investment conference in London that: “The ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.”

He sought to calm financial markets after a volatile week that saw Spain’s borrowing costs once again reach an unsustainable record.

But while stock markets rallied following his remarks, some commentators accused the ECB of just stalling for more time.

Some analysts said Draghi’s comments signal that the ECB will intervene to support Spain and Italy but it is uncertain whether they will resort to quantitative easing, or printing money, as Britain and the US have done.

The ECB’s previous sovereign bond-buying programme received much criticism and was put on hold.

Draghi’s speech also caused the euro to jump in value while interest rates on Spanish and Italian bonds fell sharply.