Jan 27 - The European Central Bank's loans to banks have averted a major credit crunch, ECB President Mario Draghi has told the World Economic Forum in Davos. Sonia Legg reports from Davos.
They may be drivers of industry but some of the delegates here in Davos struggled a little when they had the chance to get behind the wheel of a car... on ice. But then steering the right course in the current economic climate is a little tricky at the moment. No one knows that more than the president of European Central Bank. But Mario Draghi told the World Economic Forum the ECB was firmly in the driving seat when it comes to sorting out the euro zone debt crisis. He said its decision to offer cheap loans to banks had had a major impact. (SOUNDBITE) (English) ECB PRESIDENT, MARIO DRAGHI, SAYING: "If you take half a trillion and then from that, you take off the reimbursement of other short-term facilities by the banking system in December, you get a figure of roughly 220 billion euros which is exactly the amount of bank bonds that were to come due in this period of time. So we know for sure that we have avoided a major, major credit crunch, a major funding crisis." Supermario, as he is known, did acknowledge that credit remains seriously impaired in parts of the euro zone, but he insisted the ECB was doing enough. (SOUNDBITE) (English) ECB PRESIDENT, MARIO DRAGHI, SAYING: "The amount of progress is outstanding. We look at the progress that countries have made in the euro area in fiscal retrenchment and in undertaking structural reforms, it's amazing. If you compare today with even five months ago, I think the euro area is another world. There is a lot of done things and there is a lot of determination to do more to more things. There will have to be deliveries, of course." International Monetary Fund boss Christine Lagarde was also in Davos - on a fund raising mission. She's wasn't quite so upbeat. (SOUNDBITE) (English) MANAGING DIRECTOR OF THE INTERNATIONAL MONETARY FUND, CHRISTINE LAGARDE, SAYING: "The Europeans have to help themselves even more than they have so far. The international community must help as well which is why I am going around the world to try raise funds to supplement our capacity to lend to all our members if things were to go wrong. But look at the United States and Japan, they have to do something as well - they have to really demonstrate that they have a medium term objective which is to reduce their debt, to reduce their deficit and to run their public affairs on a much more sustainable and balanced basis." The main guests have all now had their say. Whether they've achieved anything may not become clear for some time. Sonia Legg in Davos for Reuters