For the third time in three years, the European Central Bank (ECB) deployed heavy artillery to lift the Eurozone out of the doldrums. Mario Draghi, President of the ECB, continues to find new monetary recipes to save the political currency. But southern Europe is cracking under the austerity policies, while France is in the grip of anti-EU sentiment. Political turmoil is threatening Europe and there is nothing the ECB can do about it.
Without the ECB, the euro would no longer exist, but can the currency union survive only thanks to the ECB? The answer is no. At the end of 2011, monetary union was on the verge of collapse and European leaders were powerless. Draghi stepped in and pumped €1.1 trillion into the banking sector. Banks got loans for a period of three years at a low interest rate and without asking a lot of questions about collateral. This 'revolutionary action' helped for several months. In the summer of 2012 Draghi was again taking the lead as interest rates on Italian and Spanish government bonds were skyrocketing. To save the euro, he said he would do "whatever it takes". Lenders could count on Draghi to speed up the printing press if necessary. They were temporarily reassured.