Can the ECB chief lead eurozone out of crisis?

O'Neill: EU 'waiting for leadership'
O'Neill: EU 'waiting for leadership'


    O'Neill: EU 'waiting for leadership'


O'Neill: EU 'waiting for leadership' 03:06

Story highlights

  • Investors await Thursday's meeting of the European Central Bank for possible action
  • ECB president Mario Draghi pledged "to do whatever it takes" last week, buoying markets
  • Goldman Sachs' JIm O'Neill: "The eurozone is waiting for leadership"
  • Analyst: "It would really be a game changer if his actions met his rhetoric

European Central Bank President Mario Draghi is talking the talk, but now will he walk the walk?

That is the question on the minds of global investors this week ahead of Thursday's ECB governing council meeting, after Draghi's comments that the ECB is "ready to do whatever it takes" to preserve the euro currency. Market watchers parsed the statement as a hint that the ECB is ready to intervene to bring down borrowing costs for Spain and Italy, the nations next in the firing line of the eurozone debt crisis.

Markets rallied after the announcement, but is the optimism misplaced?

"To be quite honest, I'm doubtful that we'll see any meaningful stimulus, certainly not the extent that the markets seem to be pricing in after Mr. Draghi's comments last week," Michael Hewson, of CMC Markets, told CNN.

"It would really be a game changer if his actions met his rhetoric, I think we are building ourselves up for a little bit of disappointment as we head into the end of the week," Hewson said.

For Jim O'Neill, chairman of Goldman Sachs Asset Management, the comments from Draghi were the "first real bold signs of leadership" to help guide the eurozone out of the debt crisis that has threatened the 17-nation currency union.

"The reaction to Draghi's comments in stock markets around the world is absolutely fascinating," Jim O'Neill told CNN's Richard Quest. "What is missing is confidence around the world amongst private business people.

"The substantive issue at the core of it with this ridiculous mess in the eurozone is waiting for leadership," O'Neill said.

"It's all about leadership -- he is the president of the ECB," O'Neill said. "And even if the Bundesbank (Germany's central bank) objects, it is only one member of the 17 countries -- Mario's got to somewhere say, `I understand, and I didn't think you'd like it, but we're going to do it'."

Part of the void in leadership is the ability to bolster the psychology of investors, O'Neill suggests. "The fact that the equity markets rallied so much Thursday and Friday (after Draghi's comments) -- If I was a policy maker, I would think, "Hmm - it doesn't take that much (to rally markets)'," O'Neill said. "If you want to look at some of the most successful interventions in my 30 years, the ones that are persuasive enough with the statements and a little bit of money usually go longer than the ones where they say a little, then keep coming back doing different things.

"Yes, they've had a big rally -- that's great," O'Neill said. "But they've got to make sure it's for real."

      Europe's financial crisis

    • German Chancellor Angela Merkel talks with Finance Minister Wolfgang Schaeuble during a session at the Bundestag (lower house of parliament) on June 25, 2013 in Berlin.

      Schaeuble: 'Don't see' bailouts

      German Finance Minister Wolfgang Schaeuble says the eurozone's problems are not solved, but "we are in a much better shape than we used to be some years ago."
    • IBIZA, SPAIN - AUGUST 21:  A man dives into the sea in Cala Salada beach on August 21, 2013 in Ibiza, Spain. The small island of Ibiza lies within the Balearics islands, off the coast of Spain. For many years Ibiza has had a reputation as a party destination. Each year thousands of young people gather to enjoy not only the hot weather and the beaches but also the array of clubs with international DJ's playing to vast audiences. Ibiza has also gained a reputation for drugs and concerns are now growing that the taking and trafficking of drugs is spiralling out of control.  (Photo by David Ramos/Getty Images)

      Spain keeps partying

      Summer could not have come soon enough for Lloret de Mar, a tourist resort north of Barcelona. Despite the country's troubles, it's partying.
    • The Euro logo is seen in front of the European Central bank ECB prior to the press conference following the meeting of the Governing Council in Frankfurt/Main, Germany, on April 4, 2013.

      OECD: Slow recovery for Europe

      The global recovery has two speeds: That of the stimulus-fed U.S. and that of the austerity-starved eurozone, according to a new report.
    • The flags of the countries which make up the European Union, outside the European Parliament in Strasbourg, France.

      Europe's new threat: Slow decay

      The "rich man's club" of Europe faces economic decay as it struggles to absorb Europe's "poor people", according to economic experts.
    • Packed beaches and Brit pubs? Not necessarily. Here's what drew travelers to one of Spain's most beautiful regions in the first place

      Spain aims for big tourist summer

      Spain's economic crisis is in its sixth straight year yet tourism, worth 11% of GDP, is holding its own, one of the few bright spots on a bleak horizon.
    • Photographer TTeixeira captured these images from a May Day protest in Porto, Portugal, Wednesday by demonstrators angered by economic austerity measures. "People protested with great order, but showed discontent against the government who they blame for this economic crisis," she said. "They want the government to resign and the Troika [European Commission, International Monetary Fund and European Central Bank] out of this country."

      May Day protesters flood Europe

      As European financial markets close for the spring celebration of May Day, protesters across Europe and beyond have taken to the streets to demonstrate.
    • Croatian Prime Minister Zoran Milanovic delivers a speech in Mostar, on April 9, 2013. Prime Ministers from Bosnia's neighboring countries arrived in Bosnia with their delegations to attend the opening ceremony of "Mostar 2013 Trade Fair".

      Croatia PM: We need Italy to recover

      As Croatia prepares to enter the 27-nation European Union, the country's Prime Minister says Italy must return to being the "powerhouse of Europe."
    • Anti-eviction activists and members of the Platform for Mortgage Victims (PAH) take part in a protest against the government's eviction laws in front of the Popular Party (PP) headquarters in Mallorca on April 23, 2013.

      Spain's unemployment hits record

      Spain's unemployment rate rose to a record high of 27.2% in the first quarter of 2013, the Spanish National Institute of Statistics said Thursday.
    • People protest against the Spanish laws on house evictions outside the Spanish parliament on February 12, 2013 in Madrid, Spain.

      Welcome to Madrid: City of protests

      Spain has seen hundreds of protests since the "Indignados" movement erupted in 2011, marches and sit-ins are now common sights in the capital.