Reuters: Draghi under pressure to deliver on pledge to save euro

30 July 2012

European Central Bank President Mario Draghi must back up his pledge to do what it takes to protect the euro when the bank's policymakers meet, or face deep disappointment from investors expecting immediate action.

Draghi said last week that, within its mandate, the ECB was ready to do whatever it takes to preserve the euro, fuelling expectation it could revive its bond purchase programme as it did a year ago when it started buying the government debt of Spain and Italy. But that is far from certain. The ECB might instead explore new policy tools such as outright asset purchases, or quantitative easing, something its peers in Britain, the United States and Japan are already using to stimulate growth.

The ECB is under intense pressure from within and outside the eurozone to intervene and bring those governments' soaring borrowing costs under control, as the debt crisis deepens and increasingly poses a risk to the global economy.

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