Europe is tanking today after the European Central Bank’s Mario Draghi quite literally failed to put his money where his mouth is. Last week, Europe cheered when Draghi said in a press conference that the ECB would do “whatever it takes” to save the euro. He also said that the high bond yields in Spain and Italy interfered with his ability to conduct monetary policy. This is a key point, because Draghi and the ECB often hide behind jurisdiction as a way to avoid steps that would help the troubled sovereigns, like direct purchases to depress bond yields. The language Draghi used made it appear that he believed those high yields fell under his jurisdiction.

Just on his statements alone, the bond yields in Spain and Italy dropped significantly. But at some point, Draghi would have to back it up. He had an opportunity today, as the ECB held a policy meeting. But the central bank decided to do nothing. Business Insider reports:

European Central Bank President Mario Draghi failed to announce any definitive measures to address concerns about the burgeoning sovereign debt crisis in his latest post-decision press conference.

The ECB Governing Council also decided to leave interest rates unchanged at 0.75 percent.

Analysts expected Draghi’s speech to be far more exciting, for if he was ready to announce new, non-standard measures from the ECB he would have done it in that press conference [...] While Draghi implied that such measures could be in the works, he instituted an important precondition: EU leaders must address concerns about official sector seniority in sovereign debt holdings (in other words, the implicit guarantee that the public sector will not take losses in the case of a debt restructuring) and they must decide how to use the EFSF/ESM bailout funds to purchase sovereign bonds.

Basically, Draghi threw it back on the EU, and refused to ride to the rescue, again. Meanwhile, Europe is sick, and Draghi still has CONVENTIONAL policy options, as the interest rate is 0.75%, when it could be as low as zero.

So European markets are dropping precipitously and the bond yields have snuck back up, closing in on the crucial 7% line in Spain. Draghi cannot accomplish the securing of the euro with just words alone. At some point he needs to act. If he refuses, the euro won’t be around much longer.