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Markets Magazine

3 Words and $3 Trillion: The Inside Story of How Mario Draghi Saved the Euro

On July 26, 2012, the European Central Bank president drew a line in the sand and framed his legacy. 


It’s July 26, 2012. In financial markets, a dark storm is brewing, but on this Thursday morning it’s as if London doesn’t care: The sun bathes the waking city in golden light. Lancaster House, a Georgian mansion that sits between Buckingham and St. James’s palaces, is bustling with activity ahead of an investment conference convened by Prime Minister David Cameron. At a morning panel, several luminaries, including European Central Bank President Mario Draghi and Bank of England Governor Mervyn King, have been brought together to discuss challenges to the global economy.

As weighty as the subject is, and even though the euro is under siege as a three-year-old sovereign debt crisis wracks Europe, the room lacks a heightened sense of anticipation. “No one had planned this to be an event of great significance,” King recalls. “This is important in understanding what happened next.”