Trichet Clears the Decks for Draghi to Use All ECB Tools

European Central Bank President Jean-Claude Trichet is clearing the decks for Mario Draghi to step up the fight against Europe’s worsening debt crisis.

“If it remains a market crisis, the ECB may just give banks more liquidity but if it spreads to the real economy, they may even cut rates,” said Chris Scicluna, deputy head of economic research at Daiwa Capital Markets Europe in London. “If things get bad enough, Draghi’s first job in November may be to cut rates. Trichet prepared the ground for it.”