FRANKFURT, Germany — The European Central Bank on Thursday took its most ambitious step yet toward easing the eurozone crisis, throwing its unlimited financial clout behind an effort to protect Spain and Italy from financial collapse.
Mario Draghi, president of the central bank, won nearly unanimous support from the bank’s board to buy vast amounts of government bonds, a move that would relieve investor pressure on troubled countries but also effectively spread responsibility for repaying national debts to the eurozone countries as a group.
The decision propels political leaders further down the uncertain and winding road toward a Europe with centralized control over government spending and economic policy, instead of a collection of nation states that sometimes seem to share little more than a currency and a slumping regional economy.
Draghi demonstrated once again that he may be Europe’s most powerful leader, perhaps the only one capable of brokering an accord among politicians whose national concerns and mistrust of one another have allowed the crisis to boil for two and a half years.
But there is a risk once again that monetary policy is moving faster than political leaders are able to create the institutions, such as a European bank supervisor, needed to ensure the survival of the common currency. For the central bank itself, the pledge Thursday to buy bonds from sovereign states, in conjunction with a fund financed by governments in the 17 European Union nations that use the euro, is a major evolution from its original narrow mandate to restrain inflation.
The bank and Draghi had the quiet support of all European leaders in taking this latest action, aimed at keeping bond speculators from driving Spain and Italy into budget-blowing borrowing costs.
“The euro is irreversible,” he repeated several times Thursday.
Angela Merkel, the chancellor of Germany, voiced her approval during a visit to Spain on Thursday — a crucial victory for Draghi. But among German political leaders and citizens, widespread fear remains that they might some day wind up paying the bill if any country defaults on debt held by the central bank.
The bond-buying plan immediately reduced the financial pressure that had been building on Spain and Italy, even though those countries have not sought protection. The effective interest rate on Spanish 10-year bonds fell below six percent for the first time since May, and the corresponding Italian bond fell below five percent for the first time since April.