"The European Central Bank can only act within the framework of the European treaties, it should not be asked to do things that are outside the treaties". The Eurotower can do from lender of last resort only “for solvent banks” on payments. This is the warning issued this morning by the president of the ECB, Mario Draghi, speaking before the European Parliament.
According to Draghi, however, “they should not be excluded far-reaching changes to the European treaties“, even if “faster processes are also conceivable”. In particular, "what I believe our Economic and Monetary Union needs is a new fiscal compact, a fundamental reaffirmation of the rules together with the mutual fiscal commitments that the governments of the Eurozone have made”.
The agreement “would ensure that the latter become fully credible, individually and collectively. We might ask whether that would be enough to stabilize markets, and how a credible long-term view can help in the short term. Our answer is that this would certainly be the most important element to start restoring credibility”.
This would be “the most important signal from the governments of the Eurozone which are embarking on the path of an overall deepening of European integration. It would also represent a trajectory for the future evolution of the Eurozone, thus framing expectations”.
