The lifeline that the European Central Bank (ECB) has thrown to troubled eurozone governments with its bond buying programme "can only be limited," dpa cited ECB President Mario Draghi as telling the European Parliament on Thursday. "Of course, such interventions can only be limited. Governments must - individually and collectively - restore their credibility vis-a-vis financial markets," Draghi said. French politicians and several economists have argued that only the ECB can save the eurozone from collapse in the short term, by stepping up its purchases of Italian and Spanish bonds or even acting as a lender of last resort. But Draghi, aligning himself with German arguments, insisted that the best solution was rather agreeing tighter eurozone budget rules "to start restoring credibility" of governments, even though they might take some time to enter into force. "We might be asked whether a new fiscal (rulebook) would be enough to stabilise markets and how a credible longer-term vision can be helpful in the short term. Our answer is that it is definitely the most important element to start restoring credibility," he said. "Confidence works backwards: if there is an anchor in the long term, it is easier to maintain trust in the short term," Draghi added. Eurozone and EU leaders are expected to debate German-led calls to introduce tighter eurozone rules through a change in the EU treaties in two summits on December 8-9. "We should keep our options open. Far-reaching treaty changes should not be discarded, but faster processes are also conceivable," the ECB president commented.
