As fresh concerns over Spain and Italy rattled the markets this week, the European Central Bank insisted it can only treat the symptoms of the euro zone debt crisis, but not cure it.
"The ECB has addressed the immediate symptoms but monetary policy cannot cure the underlying causes," said ECB executive board member Benoit Coeure.
After three months of calm, the debt crisis has returned with markets plunging and borrowing costs for Spain and Italy jumping.
ECB board member Coeure insisted that the rise in Spanish bond yields did not reflect Spain's economic fundamentals.
And seeing that the political will was there in Madrid, he saw no reason why the situation in Spain would not normalise, he argued.
Both Germany and France similarly felt that market fears over Spain's finances was "excessive," insisting that Madrid was pursuing the proper reforms.
He made his comments at the conference in Paris today.
The ECB's Coeure said that taking the euro zone as a whole, "the situation in the financial markets has reached a turning point but recent market developments have highlighted that it remains fragile."
Given the signs of fresh tension, there have been calls for the ECB to come to the rescue. The central bank has acted as firefighter from the very beginning of the crisis, taking a series of what it calls "non-standard" measures to prevent a collapse of the single currency.
On top of conventional monetary policy moves such as cutting interest rates to historic lows, it has also bought up the bonds of debt-stricken countries. And most recently, it pumped more than €10 trillion into the banking system via two so-called long-term refinancing operations (LTROs) in a bid to avert a dangerous credit squeeze.
Coeure refused to comment when asked whether the ECB would make use of its bond-buying programme to help bring down Spanish bond yields but he noted that while the Securities Markets Progamme had not been used recently, it was still in place.
Generally speaking, the ECB's measures "have helped to break a vicious cycle and to bring confidence back into the euro area financial system," Coeure said.
The bank has no plans to wind down its anti-crisis measures for now but insists it is up to governments to tackle the root causes and get their finances in order. Coeure took that point of view again today.
"All the relevant players must act responsibly by taking the necessary steps," he said. Banks needed to meet capital adequacy objectives, improve their funding profile and start lending again. Governments "must build on the steps already taken to restore sound fiscal positions and long-term growth," the ECB official insisted.
Analysts said the fresh tensions on the financial markets mirrored a realisation that ECB action was not the panacea for the long-running debt crisis.
