European Central Bank President Mario Draghi has become the inconvenient man in Europe because, to the surprise of many, he continues to insist upon taking the Lisbon treaty literally.
“We have a treaty which says no monetary financing to governments,” Draghi said Thursday, dashing hopes for a stabilization of Europe’s sovereign debt crisis and promptly sending financial markets tumbling.
The despair is understandable: Both for political reasons and because even members with relatively solid credit are at risk of being dragged down by austerity, bail-outs and the coming recession, there simply is not enough capital available to stem the crisis without heroic efforts from the ECB.
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