Draghi stands ready to helpJune 15, 2012: 8:23 AM ET
Speaking at an ECB conference in Frankfurt, Draghi said strengthening European economic growth is a critical issue that needs to be addressed sooner rather than later.
"There is a long-standing agenda on growth" he said, adding that "it is time to implement it with determination and confidence about its longer-term benefits."
Europe's debt crisis has taken an especially severe toll on the so-called PIIGS - Portugal, Ireland, Italy, Greece and Spain. Portugal, Ireland and Greece have had to be bailed out. Spain has asked for assistance for its banks. Some think that Italy's economy is now teetering on the edge of needing financial rescue.>
The ECB jumped in with two long-term refinancing operations in the past few months. This provided some 1 trillion euros worth of cheap loans to banks and briefly helped bring down interest rates. "The uncertainty about market-based funding for banks...was perhaps the most critical issue in that environment," Draghi said Friday.
But borrowing costs are back up and it's unclear what the ECB's next move might be. Draghi said it's "too early" to draw conclusions about the impact of the LTROs.
"While the process will take time, the restoration of adequate credit flows and the renewed functioning of the interbank market remain our firm objective," the ECB president said.
Draghi's comments come one day after the Bank of England and the Chancellor of the Exchequer said they're working on new policies to support the British economy.
Investors are nervously awaiting the outcome of Sunday's Greek elections. If Greece fails to form a coalition government this time around, there could be serious consequences, including a "Grexit" that could ripple through financial markets. And if radical left wing leader Alexis Tsiparis gets elected, that could put Greece's bailout in jeopardy since his Syriza party is staunchly opposed to the tough austerity measures that were a condition of the bailout.