Time for ECB to save Greece from leaving eurozone

MARIO Draghi's July 2012 speech in London, in which he promised "to do whatever it takes to preserve the euro", has been widely credited with bringing the single currency back from the brink. It is time for the European Central Bank (ECB) president to attempt a similar feat for Greece.

Mr Draghi followed up his July statement in early September 2012 with agreement on the outright monetary transactions (OMT) programme for unlimited purchases of euro area government bonds. Since then, OMT has been in legal and political limbo, largely overshadowed by the quantitative easing (QE) action the bank started in March.

Greece is in a dire state after yet another inconclusive Brussels summit on Tuesday night, and with officially declared bankruptcy staring it in the face. Several national parliaments seem almost certain to block state funding for fresh loans to Greece. The Greek banking system is in free fall. So it may be time to turn to OMT for the answer.