The ECB has the unlimited firepower to back stop wobbly governments, and furthermore, every other modern economy basically works this way: The central bank, not the bond market, is the real funding mechanism for governments. That's why Japan, the UK, and the US don't have sovereign debt crises despite huge government debts.
So when ECB chief Mario Draghi unveiled a plan a couple of weeks ago to buy unlimited amounts of short-term government debt, it appeared that at least a mechanism that would actually work would soon be put into place.
And that mechanism (known as OMT) could work if it gets off the ground, but the rules are that a country has to seek outside aide and oversight in order to be eligible for bond buying, and here's where we run into a problem that the ECB can't solve.
In a note to clients this morning, in the aftermath of the massive protests in Spain, SocGen's Kit Juckes put it bluntly:
That's what the Spanish protests tell us - Mario may be Super, but cheaper funding won't save Europe unless there's a growth strategy.