In normal times, a lot of effort is put into making this backing as ambiguous as possible to reassure markets that they are free from direct political control - hence the so called independence of the Bank of England. But the BoE is 100% owned by HM Treasury. The ECB is owned by 27 national central banks, each with their own constitution and particular relationship to their home state.
Buiter indicates that the markets are pricing in the possibility of default by some Eurozone national governments - particularly Ireland, Greece, Portugal, Italy and Spain (in that order of risk). So,
".... it is reasonable for the EBC/Eurosystem to insist on a joint and several guarantee by all 16 Eurozone governments for any Eurozone government debt acquired by the ECB...... Such a joint and several guarantee does not exist at the moment - a reflection of the absence of a fiscal Europe and a fiscal Eurozone...The ECB has no fiscal back-up. There is no guarantee, insurance or indemnity for any private credit risk it assumes. "
So it can't easily do Quantitative Easing. Which would seem to suggest either clever folk like Buiter convince them to sort out some 'held-together-with-string' temporary fix (which he doesn't think will work given the Fortis experience), something big has got to change in the democratic architecture of Europe or, simply, deflation beckons across the Eurozone.
Back in December I wrote,
"That hoary old Marxist chestnut of a question, the relative autonomy of the State, may rear its head again. A thousand undergraduate essays ...... will be dusted down and regurgitated. But the old essays may be missing the point. It may be that the thing to explain in 2009 is not the 'gap' between direct class power and State action which Miliband and Poulantzas tried to theorise, but the speed and nature at which this gap decreases."
But I was talking about the UK, not the EU. I think too small sometimes.