| Bloomberg: |
| "What is different now is that the two countries with their backs against the wall, Italy and Spain, represent 28 percent of the $12 trillion economy and have new leaders that have forced through deficit-slashing measures over mounting domestic opposition. (...) in August 2011 (...) With Europe's rescue fund not yet empowered to intervene on bond markets, Trichet ended up going solo in starting the purchases of Italian and Spanish debt. Italy's then-government, led by Silvio Berlusconi, chafed at the ECB's insistence on budget cuts, and the central bank had no way of enforcing its writ. Opposition from the two Germans on the ECB's policy council limited the size of the bond purchases and led to their suspension six months later. Draghi is operating in a different political constellation. Berlusconi is gone, replaced by (...) Mario Monti, now in the midst of enacting 26 billion euros of spending cuts. In Spain, Prime Minister Mariano Rajoy has delivered three rounds of austerity since taking office last December. Moreover, Europe's political establishment has courted the ECB by giving Draghi a lead role in fixing the birth defects of the monetary union (...). A bond-buying program would require Italy and Spain to make austerity and economic-reform commitments - or potentially only restate the ones they've already made - and submit to international monitoring." |
| source: ECB-Politicians' Anti-Crisis Bargain Starts To Emerge | Bloomberg |