Editorial: Mario Draghi actions take us a step away from a European financial crisis
Mario Draghi gets it.
From his first days as president of the European Central Bank, when he quietly found a way to bail out the continental banking system with cheap loans, Draghi understood that Europe was on the brink of a financial crisis that could impoverish millions and torpedo the global economy.
While European politicians dithered, Draghi acted. Now he's persuaded eurozone nations to give him the power to buy government bonds in unlimited quantities from struggling euro countries if they ask for help, as Spain is likely to do.
The central bank will only buy bonds due in three years or less, keeping pressure on supplicant nations to reform. And it will suck equal sums of euros out of the European economy to ward off the chimerical threat of inflation -- and the very real threat from German critics obsessed with it. They might have derailed the bond-buying plan.
The result is a big step in the direction needed all along: toward more European fiscal unity and greater burden-sharing by Germany and other solvent countries, which must realize that the alternatives, such as letting Spain default, would be far costlier. Unlike Greece, Spain is too big -- and fiscally responsible -- to let fail.
Americans can breathe a sigh of relief, since we aren't insulated from Europe's troubles; any eurozone banking failures would have hit our economy too. The crisis is far from over, but at last somebody is doing something about it.