Mario Draghi's criticism of the EU hurt markets yesterday. It was necessary for someone with a position of authority, the governor of the European Central Bank for example, to call things like they were and warn the EU about the consequences of their "less than intelligent" actions related to the Cyprus bailout.
Draghi created a firewall to protect euro zone banking deposits and made it clear that the Cyprus bailout model will not be applied elsewhere in Europe. He is opposed to Europe backing deposits held by savers at failing banks.
But the most important part of Draghi's intervention is his mandate to European leaders that they continue their efforts to build a unified banking system in the region. Banking union is the antidote that can save the euro zone and the EU cannot afford to waste any more time creating it.
