ECB ‘looks clueless’ in tackling fragmentation

The eurogroup of finance ministers would have to decide whether the ESM is used to recapitalise the Irish banks, but the ECB backs any proposal that breaks the link between banks and sovereign debt, said its president Mario Draghi.

Speaking at the European Central Bank’s monthly meeting, Mr Draghi was responding to a question about the IMF’s latest review of the Irish economy in which it urged its troika partners to inject European Stability Mechanism funding into the Irish banking system.

The ECB left interest rates unchanged again this month. Mr Draghi declined to say whether a rate cut was on the cards over the summer months.