In an interview with French newspaper Le Monde, ECB President Mario Draghi was asked if the eurozone was in danger. Draghi said, “No, absolutely not. We see analysts imagining the scenario of a euro zone blow-up.” Some analysts have been predicting a complete eurozone break up as a worse case scenario.
Draghi also said in the interview, “They (analysts) don’t recognize the political capital that our leaders have invested in this union and Europeans’ support. The euro is irreversible.” Draghi added, “All movement towards financial, budgetary and political union is for me inevitable and will lead to the creation of new supranational bodies,” he said.
European leaders took a step towards greater integration last month at a Brussels summit, specifically financially. They agreed to give the ECB the power to supervise banks and the ESM rescue fund power to recapitalize struggling banks.
The summit last month gave little relief to the markets though as Spain’s bond yields approached the dangerous 7%+ level which is not sustainable. Late last week, the euro hit record lows against multiple currencies as investors worry that Spain’s government may ask for a complete bailout joining the ranks of other countries that have received bailouts.
All eyes will remain on Europe for the foreseeable future as investors continue to wait for some kind of lasting resolution to the crisis.