Mario Draghi

Some problems are too complicated to cause the fear they deserve – like Target 2, Europe’s trillion euro time bomb.

In the wake of the financial crisis power shifted from politicians to the ECB, now it’s time for elected governments to address the underlying causes of Europe’s malaise.

By demonising ‘deflation’ (even if it is really just price stability by another name), the ECB underlines its commitment to helping the eurozone’s debtors, whether they are financial institutions or governments. The response to this so-called deflation threat will be to maintain interest rates negative or even embark on a program of quantitative easing, which may be announced over the coming days. In effect, however, such policies are just bailout programs by stealth.

The ECB’s big experiment with negative interest rates is finally reaching ordinary people and two things are ironic about it: First, that it was a bank with a hint of gambling in its name which finally drove this message home. And second, that of all weeks in the calendar it had to happen during world savings week: the last week in October when European banks traditionally pretend they like to manage assets and encourage savings. If only.

With all of Europe’s woes, the ECB now looks like the last institution able to move the continent’s economy. But even the ECB cannot achieve what Europe really needs to make it viable in the long run: painful but effective economic reforms.

The next stages of the euro crisis are already programmed into the system. It is just a matter of time until the current period of calm ends. And though it is impossible to when we can expect the next euro storm, one thing we can say with certainty: The euro crisis is not over. Far from it.

The two ECB flagship projects of saving the euro and saving Europe’s banks are now both under legal threat. Sometimes “whatever it takes” is not enough if you cannot convince top judges as well.

What may look like the euro’s strength is not quite what it seems. The eurozone remains as fragmented as ever, and neither Draghi’s words nor any real actions of his central bank will make a difference to this basic problem. The only way to tackle it would be a departure of some members from monetary union.