Frankfurt: European Central Bank (ECB) president Mario Draghi told a banking conference on Friday that there had been a “relative return of confidence” in the future of the euro zone.
“I can address you today against the background of a relative return of confidence in the prospects for the euro area,” Draghi said at the European Banking Congress here.
And he said he believed the return of confidence was “justified” after “an intense year” in which the European financial crisis had initially intensified and the euro zone outlook was “increasingly fragile”.
The return took place over the summer when the Frankfurt-based ECB announced a new Outright Monetary Transactions programme (OMT), which saw Draghi promise to buy up the bonds of struggling countries if they first sign up to a bailout and strict conditions attached.
This had provided “a credible backstop against disaster scenarios”, Draghi told the conference.
But he also highlighted the “cohesion and resolve of the European leaders” who in June decided to step up moves towards a financial union and the creation of a banking union.
Draghi cautioned however that the return of confidence depended on the OMT adding he could “assure financial markets that we stand ready to implement this programme as and when required”.
He also pointed to the need for euro zone governments to press on with structural reforms at the national level, and for European leaders “to follow up with determination on their commitment to make the institutional reforms needed to complete economic and monetary union”.