The EU's Most Influential Economic Policymaker: Mario Draghi at the European Central Bank

Abstract

This paper assesses the legacy of Mario Draghi as President of the European Central Bank from 2011-2019, with particular reference to the Greek’s sovereign debt crisis. Most macroeconomic indicators improved over the course of Draghi’s tenure at the ECB, including inflation, budget deficits, yield spreads among Euro area borrowers, and unemployment. Draghi played a decisive role in turning the tide on the crisis of confidence that afflicted the Euro area and threatened the survival of Europe’s single currency in the wake of Greece’s sovereign debt crisis. Yet the ECB’s unconventional policies prompted sustained controversy and contributed to a low level of trust among peoples in Euro area member states in their central bank. The focus of controversy has been on possible asset-price bubbles and ‘hidden’ transfers between Euro area member states. When and how to normalize its policies is a major challenge for the ECB, as it is for other major central banks that adapted similar policies in response to the global financial crisis.