Draghi says ECB effort will save the euro

Mario Draghi, president of the European Central Bank, has said that the ECB will launch fresh efforts to save the euro.

The comments from the content’s top banker came on Thursday at a conference London just before the start of the 2012 Olympic opening ceremony. Mr Draghi said that the bank would do “whatever it takes” to bring relief to the crisis and reiterated that he was sure that it would “be enough”.

Some experts say that Draghi may have revealed that the ECB was planning to re-open its suspended 2010 Securities Markets Programme (SMP), which enables the organisation to acquire major portions of government bonds.

Draghi’s words prompted a subsequent rally in regional markets later in the day. The Spanish Ibex index was up 6 points at closing time whilst the Italian index managed to close up 5.6 per cent.

Likewise, bond yields dropped following the news on Thursday. Ten-year bonds in Spain that had recently hit an all-time high of 7.6 per cent dropped nearly a full point to 6.8 per cent. Analysts say the news is crucial for Spain’s economy because bond yield rates typically reflect the interest rate that would be attached if a country needs to borrow further money and that anything over 7 per cent is unsustainable.