ROBERT SIEGEL, HOST:
This is ALL THINGS CONSIDERED, from NPR News. I'm Robert Siegel. And we begin this hour with a bold move in Europe. The head of the European Central Bank today unveiled a plan that he said will help contain the continent's grinding debt crisis. Mario Draghi announced the ECB will step up its purchases of government bonds. The point is to bring down interest rates in Spain, Italy and other heavily indebted countries.
As NPR's Jim Zarroli reports, the move faces stiff opposition from some European officials who say it will fuel inflation.
JIM ZARROLI, BYLINE: Some people in Europe may be ready to give up on the euro, but Mario Draghi is definitely not one of them. For weeks, he's been dropping hints about a plan to keep the debt crisis from getting any worse. And, today, he revealed it at a press conference in Frankfurt.
MARIO DRAGHI: You say that the euro is irreversible, so unfounded fears of reversibility are just what they are: unfounded fears.
ZARROLI: Draghi's plan was shorter on details than some people expected, but there was enough there to keep investors happy, and stock prices rose. Let's say a country is struggling with too much debt, and the interest rate it pays on government debt is soaring. Draghi says the ECB will step in and buy up the country's short-term bonds as a way of tamping interest rates back down again.
And though he didn't say as much, Draghi hinted that the ECB would keep at it as long as necessary. The plans have come under attack by some European officials, including the head of Germany's Bundesbank. Unlike the U.S. Federal Reserve, they say, the ECB has only one mandate: to keep prices stable. It isn't supposed to be setting interest rates for individual countries that probably borrowed and spent too much.
But with Europe entering a recession, Draghi has a delicate balancing act to perform, one he referred to at today's press conference.
DRAGHI: We will do whatever it takes within our mandate - within our mandate - to have a single monetary policy in the euro area and to maintain price stability in the euro area and to preserve the euro.
ZARROLI: In other words, the ECB's main job is to keep inflation under control. But saving the euro will take much more than that. Draghi made clear the bond-buying program is, at best, a temporary measure and European officials must begin to think in broader and bolder terms. That means building the kinds of institutions and regulatory bodies the eurozone needs to keep crises from growing out of hand. It also means implementing the kinds of economic reforms that will make European countries more competitive.
In the meantime, Draghi says, the measures he announced today can help keep debt crisis from spiraling out of control. Jim Zarroli, NPR News, Berlin. Transcript provided by NPR, Copyright NPR.
