Mario Draghi told the annual conference of Germany's main industry lobby group, the Federation of German Industries, that there are already signs the ECB's announcement of its plans is having a positive effect on financial markets.
But he made clear he's committed to ensure that governments do not skip or delay promised economic reforms because of the improvement in market conditions.
Draghi earlier this month unveiled a plan to buy unlimited amounts of government bonds to help lower borrowing costs for struggling countries if they agree to take steps to lower their deficits and debts.
That move has met with skepticism in Germany and is opposed by the head of the country's influential central bank, the Bundesbank, which is the biggest shareholder in the ECB.
The ECB says it will only consider buying countries' bonds if their governments first apply for aid from Europe's bailout funds, which comes with conditions on their spending policies. The German government has signalled its support, but the plans have still generated worries that the purchases could undermine the ECB's official mission of fighting inflation.
Bundesbank President Jens Weidmann says they come too close to using the ECB's power to print money to support governments' finances.
Draghi tackled those worries head-on, telling his audience that the ECB's governing council had faced a choice of saying "nein zu allem" — German for "no to everything" — or acting to stabilize market conditions, which was necessary for its monetary policy to function properly.
"These new steps are not a departure from our mandate — in fact they are the only way to ensure that we continue to fulfil our mandate," Draghi said. "In the current circumstances the greatest risk to stability is not action, it's inaction."
He also nodded to the concerns of the Bundesbank — which, industry federation head Hans-Peter Keitel noted as he introduced Draghi, is "an icon in Germany."
Draghi said he had "an enormous respect for the Bundesbank, and many of the concerns that were expressed are entirely shared by me and the rest of the governing council — although we may have different views about the response."
The ECB president earlier met with German Chancellor Angela Merkel, who has supported his new bond-buying plans.
The two agreed Tuesday that governments must remain committed to reforms in order to improve competitiveness and restore credibility, Merkel's spokesman, Steffen Seibert, said in a brief statement.
"Our measures can only build a bridge to a more stable future," Draghi said.
The measures, he added, must be complemented by government actions to create stronger institutions for the eurozone. Among the biggest that European leaders are working on is a banking regulator with the power to rescue lenders anywhere in the region.
"They are making progress in this direction," he said.
One key challenge, Draghi noted, was to ensure that the market relief that comes from the ECB plan to buy bonds and European efforts to integrate does not weaken individual governments' resolve to reform their economies and public finances.
Since Draghi announced the ECB was considering bond purchases, stock and bond markets have rallied, particularly in debt-heavy Spain and Italy.
Draghi said that, since the beginning of September, banks in the eurozone have issued about €27 billion ($35 billion) in new debt, the most since March. "Some of these banks had not been able to access the market for almost 6 months previously," he said.
He won applause for underlining the ECB's insistence on reforms as a precondition for considering bond buys
The charm offensive appeared to play well with Draghi's hosts.
"I think you improved confidence ... by your very clear statements especially to safeguard price stability and the clear message that the ECB would guarantee conditionality in all its measures," Keitel said.
Merkel's office said the chancellor and Draghi discussed the plans to set up the new Europe-wide banking supervision system.
European Union plans call for the ECB to take on that task, though the details and timing remain unclear. Germany is concerned that the task to supervise and rescue banks might get in the way of the ECB's mission to control inflation in the eurozone, but Draghi said it would not become a problem.
"We'll guarantee the firm separation of monetary policy from supervisory tasks," he said.Suggest a correction