Mario Draghi, the European Central Bank president who pulled the Continent back from the financial brink late last year, is facing an even more daunting challenge as the debt crisis in Spain deepens. But this time, he may have a harder time fashioning a rescue plan that will work.
In a warning to political leaders, Mr. Draghi told members of the European Parliament on Thursday that the central bankis reaching the limits of its powers and now it is up to politicians to move quickly and decisively because the survival of the euro , the Continent’s common currency, is at stake. The structure of the currency union, he said, had become “unsustainable unless further steps are undertaken.”
The note of frustration and urgency in Mr. Draghi’s voice was a sharp contrast to six months ago, when he took over as central bank president and eased the crisis with what was considered a bold easy-money plan that extended some $1.3 trillion in low-interest loans to large banks throughout Europe to restore confidence.
But the success of that plan has been short-lived, underscoring the far more limited authority he has compared with what the Federal Reservechairman, Ben S. Bernanke, had at the height of the financial crisis in 2008. And the few options at Mr. Draghi’s disposal help explain why pessimism is growing about Europe’s ability to contain its crisis.
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