So “Super Mario” did it. The European Central Bank President on Thursday announced “unlimited bond-buying” to tame profligate eurozone members’ borrowing costs. “Under appropriate circumstances, we will have a fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability,” Draghi told an expectant world.
The ECB, then, is still referring to “price stability”, pretending its actions are designed with its regular inflation-target in mind. We are, patently, a long way beyond that point. Draghi’s plan is the latest ECB attempt – perhaps the most serious yet – to prevent the break-up of the single currency. Be aware, though, that “perhaps” is the operative word.