NEW YORK TIMES: ….In a warning to political leaders, [Mario Draghi, the European Central Bank president] told members of the European Parliament on Thursday that the central bank is reaching the limits of its powers and now it is up to politicians to move quickly and decisively because the survival of the euro, the Continent’s common currency, is at stake. The structure of the currency union, he said, had become “unsustainable unless further steps are undertaken.” …
Europe’s problem, much like in the United States in 2008, is that its financial system is fraying. Troubled countries and weakened banks alike have difficulty borrowing money to sustain their operations as nervous investors pull back from risk.
The solution to the 2008 crisis, orchestrated by Mr. Bernanke along with the Treasury secretary, Henry M. Paulson Jr., was to flood the banking system with hundreds … (more)
