FELICE anniversario! Today marks five years since “Super Mario” Draghi took the reins at the European Central Bank, tasked with bringing monetary stability to the Eurozone while helping the bloc recover from a severe economic slump – hardly child’s play.
It has been an eventful half-decade. Highlights include the now-famous speech in the summer of 2012, delivered here in London, which contained a pledge to do “whatever it takes” to save the euro. Those three little words, coming in the midst of a crippling sovereign debt crisis, were widely credited for easing nerves and preventing a downward spiral that threatened to destroy the single currency.
A somewhat more bizarre and frivolous challenge arrived last year, when Draghi was the target of an elaborate protest – a young woman snuck into an ECB press conference, jumped on the Italian central banker’s desk, and showered him with papers and confetti. The incident may be relatively unimportant, but Draghi’s calm and responsible reaction (he earned applause from the assembled journalists for completing the conference without any fuss) reflects the way in which he has undertaken his responsibilities.
In recent times, with the Eurozone’s struggling economy appearing to require even greater stimulus, and the threat of a deflationary spiral lingering over the bloc, he has delivered a new “bazooka” of measures in a manner so understated that it almost seems contradictory to the bold, historic, and unprecedented policies.
If one phrase was to encapsulate Draghi’s five years in the job it would be the constantly-repeated reminder that central bankers can only do so much – the real power to reform economies lies in the hands of government. The influence wielded by central bankers is enormous, and the consequences of getting it wrong can be terrifying, but ultimately Draghi is correct: central banks can steady the ship, but they can’t change its direction.
Last night the Bank of England’s own chief rate-setter, Mark Carney, revealed he would stay at Threadneedle Street until 2019, a year longer than had been expected. The decision should help calm the environment surrounding Article 50, but Draghi’s mantra reminds us that the success, or failure, of Brexit lies completely out of Carney’s hands.