The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists. -- Hemingway
Perhaps Hemingway met Draghi's kinfolks. In any case, the irrational exuberance, as Greenspan once intoned, of the markets looks to me like a "so far, so good" response. What do people think Draghi is going to do to "save" the euro? What options are left? Basically, it comes down to the European Central Bank somehow buying into the Spanish and Italian bond markets and driving down the rates. Direct intervention by the ECB in the way the Fed buys U.S. Treasuries is supposedly contrary to the law. Not that laws ever stopped criminals -- by definition.
Is Draghi threatening to drastically devalue the euro? Will the Germans and the Finns stand by and allow themselves to be impoverished for the sake of the Eurozone? I guess we will see.
Hemingway's second option sounds laughable these days, but desperate people will do desperate things.