Draghi declined to specify exactly what would be a high enough interest rate to trigger ECB intervention to push yields down. But he put no limit on how much the bank would buy — an open-ended commitment that the ECB hopes will strongly discourage market speculation.
An earlier, more limited bond-buying spree failed to contain the crisis in part because investors simply drove up interest rates once again after it stopped.
To keep the heat on governments, however, he said that any country needing the ECB to buy its bonds would first have to agree to initiate or continue painful economic reforms and austerity cuts to reduce high deficit and debt levels. Failure to do so would result in their being cut off from the bond program.
Many analysts believe that Spain is close to asking the ECB to step in. At a news conference with German Chancellor Angela Merkel in Madrid, Spanish Prime Minister Mariano Rajoy declined to say whether he would make such a request.
European stock markets soared after Draghi's announcement, though such major gains quickly evaporated on previous occasions when Europe's leaders had unveiled efforts to shore up their monetary union.
Azad Zangana, European economist for Schroders in London, said the new program would provide short-term relief for struggling nations but would not remove all fears that Spain and Italy will eventually need full-scale rescue packages that their neighbors can scarcely afford.
"The ECB has taken another step in the right direction," Zangana said. "However, the capacity of the ECB and European governments to bail out Spain and Italy is seriously lacking."
Concern had mounted in recent days over the scope of Draghi's new battle plan, especially after reports that the head of Germany's Bundesbank, the most important national central bank in Europe, had threatened to resign if the ECB undertook large-scale bond-buying.
Jens Weidmann, the Bundesbank president, warned that unrestrained purchases would go beyond the ECB's mandate of controlling inflation, and he publicly compared bond-buying to drug addiction for troubled governments.
Draghi acknowledged such objections Thursday. But he said that the euro crisis had made the ECB's task of reining in inflation through regular mechanisms more difficult, making the bond-buying program necessary.
"We act strictly within our mandate to maintain price stability over the medium term," he said.
