When Mario Draghi took over as president of the European Central Bank at the
beginning of this month, it was felt that he had to prove his credentials in Germany.
That task is made harder by calls on the ECB to act as backstop to troubled Italy,
Mr Draghi’s home country, and to contain a sovereign-debt crisis that is raising
borrowing costs for most euro-zone countries, while driving them down in Germany.
s much as reform in Italy and elsewhere is needed, it seems unlikely that promises
to be austere will halt what looks like a run from all euro-zone bonds but German
ones.
It's hard to argue with Germany's complaints that the European Central Bank doesn't have the power and rights to do some of the things its being called to do. That's one of the biggest issues with the monetary union. The ECB is no ordinary central bank, and that fact is partially restraining its actions or ability to act at all.
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