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On the day before the opening ceremonies of the London 2012 Olympic Games, newbie European Central Bank president Mario Draghi came to town to deliver a speech. His presence at Lancaster House, a Georgian mansion tucked between Buckingham Palace and St. James’s Palace, did not attract many reporters. The city had more glamorous events on offer that day.

Rather reluctantly, I broke from my Olympics assignment to hear Mr. Draghi speak, not expecting anything newsworthy, let alone sensational. But what he said in his monotonous, Italian-accented English would roil the markets and set in motion a series of events that would ultimately spare the euro zone from destruction.

Three words stood out in his short speech. The ECB, he said, would do “whatever it takes” to preserve the common currency. His words were obviously carefully chosen – careless and glib he has never been.

At the time, almost four years after the 2008 financial crisis, the euro zone still seemed on a kamikaze run. Sovereign bailouts had put Greece, Ireland and Portugal on life support. Greece’s ability to keep the euro was an open question. Italy, the euro zone’s third-largest economy, was the big worry. The yield on Italian benchmark bonds had hit 7 per cent, a crisis level that had shut the three bailout victims out of the public debt markets. There was no way the euro zone, or the wider European Union, could survive the collapse of an economy bigger than Canada’s.

Mr. Draghi’s pledge, backed by an arsenal of “unconventional” financial weapons, worked its magic. On Thursday, in Frankfurt, after he chaired his final rate-setting meeting before handing the keys to former International Monetary Fund boss Christine Lagarde, Mr. Draghi took a victory lap – sort of. He was poised, low-key and humble, as always. The closest he came to congratulating himself was this: “How do I feel? I feel like someone who tried to comply with mandate, the best possible way.”

Mr. Draghi’s tenure was almost universally praised by economists and other ECB watchers, who years ago had dubbed him Super Mario. “Under Mario Draghi’s presidency, the monetary union was saved, deflation was avoided, unemployment fell, and the popular support for the euro rose to record highs,” wrote the strategists at Switzerland’s Pictet Wealth Management.

While he may have saved the euro in the near term, the long-term future of the currency is still in doubt. The ECB’s standard and out-of-the-box monetary policies can’t work miracles forever. After a decade of putting out fires, the bank is running out of water buckets, hence Mr. Draghi’s endless pleas for governments to use fiscal policy – spending and tax reform – to pick up the slack.

They couldn’t, really, because the euro zone architecture worked against them – still does. The euro zone and the EU are losing economic momentum once again. Germany and Italy may be back in recession (Brexit-plagued Britain, too), and inflation is still well below the ECB’s target of almost 2 per cent. Mr. Draghi is leaving the ECB having indeed done whatever it took to protect the euro and revive the euro zone, but the crisis is bound to return at some point.

During his eight-year term, the ECB never once raised interest rates and even pushed them into negative territory in 2014. He launched a program called OMT – Outright Monetary Transactions – that would buy the bonds of any solvent country struggling with high debt. It was never used, but its mere presence was enough to scare off the short sellers and send bond yields tumbling (today, Italy pays less than 1 per cent for 10-year money). The ECB flooded the banks with cheap loans and launched an aggressive quantitative easing (QE) program that bought some €2.6-trillion of government and corporate bonds. Wound down last year, QE was recently revived.

These programs, especially QE, effectively solved the euro zone’s potential solvency problem. Since euro zone countries can’t create their own currencies, the ECB was the only institution that could backstop the sovereign bonds and prevent a default. The mass bond-buying program was the greatest factor behind the plummeting yields, which allowed even the region’s basket-case economies to finance themselves cheaply.

But the ECB could not address the euro zone’s other problem, which was – and remains – insufficient demand; that’s a fiscal issue. The ECB does not run a treasury that can spend on roads and bridges and schools. Only governments can do that. Guess what? Government spending was restrained by the Stability and Growth Pact, which arbitrarily set tight debt and budget-deficit limits on EU member states. Austerity, in other words.

The pact was championed by Germany, which has a genetic aversion to debt. Countries that tried to ramp up their spending to stimulate the economy and bring down high unemployment, as Italy’s populist government tried to do, were shut down pretty fast by the budget police in Brussels. Mr. Draghi was forced to accept German-inspired austerity measures, it appears, in exchange for German approval of the ECB’s lavish bond-buying program.

The result, in effect, was that the gifts provided by the ECB’s bond purchases were snatched away by the enforced austerity measures. That meant the euro zone could only partly recover while never achieving its inflation targets. The upshot is that Mr. Draghi could not claim total success at the ECB, even though economists, strategists and more than a few politicians treated him as a monetary god. He ran into the brick wall of institutional fiscal austerity. Ms. Lagarde, who officially replaces him on Nov. 1, will have the same problem.

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