LONDON — European Central Bank chief Mario Draghi vowed unconditional support for the beleaguered euro Thursday, sending markets soaring as traders eyed further action from the bank to shore up the eurozone.
In apparently unscripted comments in London, the normally reserved Draghi said his institution was "ready to do whatever it takes to preserve the euro. And believe me it will be enough".
Stressing that the euro was "irreversible", Draghi said that part of his bank's remit was to keep sovereign debt levels under control when they hampered the proper functioning of interest rate policy.
Analysts saw Draghi's comment as a hint the ECB could soon reintroduce its hotly contested programme of buying up the bonds of struggling eurozone countries that has lain dormant for several months.
As Spanish borrowing costs soared over seven percent earlier this week -- the level that forced Ireland, Portugal and Greece into bailouts -- the bank has come under increasing pressure to restart the programme.
And Draghi's hints had an immediate impact on borrowing costs, with Spain's shooting below the seven-percent mark and Italian costs plummeting to just above six percent.
The comments also sent stock markets into euphoric mood and boosted the euro on the foreign exchange markets after several days of painful declines amid fresh speculation the eurozone might implode or Spain might need a bailout.
ABN Amro economist Nick Kounis said that Draghi had "opened the door for a restart of the central bank's government bond purchase programme", untapped since February.
"The crisis response looks likely to focus on direct intervention in the government bond market," he added.
And CMC Markets analyst Michael Hewson told AFP that Draghi's remarks "suggest that the ECB may well do something about capping rising bond yields".
Attention would now turn to Draghi's monthly news conference in Frankfurt on August 2 "to see if he means what he says", the analyst added.
Since the eurozone sovereign debt crisis erupted more than two and a half years ago, the ECB has won praise as the only European institution that has acted quickly and decisively to stem the turmoil.