Mario puts it up to bungling EU leaders to lead the recovery
BLUNDERING euro leaders made the crisis worse.
That's the gist of a speech given by the European Central Bank President Mario Draghi to students in Paris yesterday.
The text, which was circulated to the media, will make uncomfortable reading for Mr Draghi's predecessor at the ECB Jean-Claude Trichet and German Chancellor Angela Merkel.
Neither is named in the speech, but along with former French President Nicolas Sarkozy, they led the initial charge to isolate and condemn euro members like Greece, and then Ireland, whose national finances buckled during the financial crisis.
The failure to treat the debt crisis as a euro-wide issue, requiring a joined-up euro area response, wasn't just unhelpful, it made things worse. With the benefit of hindsight, it is hard to imagine anyone arguing today that Europe reacted well to the crisis,
So where does that leave us? Well, for one thing, the economic recovery in Europe remains fragile. Mr Draghi indicated yesterday that he'll help that as far as he can. But in his Paris confession, he appears to be crying out to politicians to meet him half way. In that sense, the speech may be a parable rather than a history lesson.
Until June 2012, Europe flailed because there was no plan, and what plan there was pulled in different directions at once. "Look where that got us?", Mr Draghi seems to be asking.
Since then, loose money, and the promise that the ECB will print cash to ease any new threat has steadied things.
The new questions – which Mr Draghi raised yesterday in Paris – are around whether economies themselves are fit for purpose. On that, the ECB can't help, Mr Draghi said. So it's over to national governments who must now decide whether they can come together to produce a recovery, or reprise their blundering policies of the past.