Mario Draghi, addressing a European Parliament hearing on his proposed appointment as president of the European Central Bank, has endorsed the bank’s hard line against letting Greece default on its borrowings as a way to end its crushing debt crisis.
He also said great uncertainty remains in the financial markets and the banking sector: “The global crisis has accentuated investors’ perception of risk and revealed weaknesses in the architecture of the union. The exceptional response of national governments and European authorities limited the risk of contagion and safeguarded the area’s financial stability.”
Draghi said that the financial crisis, and the shaky condition of some of Europe’s’ banks, should not hinder the ECB from carrying out its main mission of fighting inflation.
To do that, the bank has already started raising interest rates and signalled it will do so again in July.
Draghi is the only candidate to succeed ECB President Jean-Claude Trichet, whose term expires at the end of October.