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Mario Draghi praised after five years at the ECB’s helm, but the job is far from over

European Central Bank (ECB) President Mario Draghi.
Yves Herman | Reuters
European Central Bank (ECB) President Mario Draghi.

Five years ago Mario Draghi took charge of an ailing euro zone economy by taking over as the president of the European Central Bank. Five years on, the crisis is somewhat under control and analysts have cheered the Italian economist for his reforms and bond-buying programs.

Nonetheless, with ultra-low interest rates and unemployment at stubbornly high levels, investors are constantly speculating as to when the economy will start to normalize.

Holger Schmieding, chief economist at Berenberg Bank, told CNBC via email that the euro crisis was at its worst when Draghi took office and while he faced a number of challenges initially he managed to steer the economy towards growth.

"His first response, offering banks virtually unlimited liquidity at generous terms, did not defuse the situation for good," Schmieding said.

"It did not suffice to re-establish investor confidence in the future of the euro. Only when he dared to tell the world that the ECB would be like other central banks, namely act as a lender of last resort in times of extreme distress, did he get the euro confidence crisis under control. His vow to 'do all it takes' worked like magic."

Schmieding further explained that the ECB's bond-buying programs helped the euro zone economy to recover and enjoy a steady expansion in line with trend growth of around 1.5 percent along with a significant rise in employment and a decline in fiscal deficits.

Hannelore Foerster | Bloomberg | Getty Images

The euro zone economy suffered the worst of the economic crisis at the end of 2009 when the peripheral member states of Greece, Spain, Ireland, Portugal and Cyprus struggled with refinancing their government debt without the assistance of third party financial institutions such as the ECB, the International Monetary Fund (IMF) and the European Financial Stability Facility (EFSF). The crisis shook investor confidence in euro zone economies and countries like Greece and Spain are still dealing with high levels of debt and unemployment.

"Mario Draghi has had the unenviable task of trying to drag the euro zone economy from its knees amid the seemingly never ending tail of the financial crisis," Danny Cox, a chartered financial planner at Hargreaves Lansdown, told CNBC via email.

"The euro zone is certainly in a better place than it was five years ago and is seeing some early signs of growth and inflation."

Cox however warned that there are challenges for Draghi and these include the U.K.'s decision to exit the European Union and high levels of debt in some countries, especially the rising levels of non-performing loans in Italy.

"The banking sector is nowhere near out of the woods yet with Greek and Italian debt problems which keep getting deferred rather than dealt with," Cox said.

But while Draghi may have done a decent job in steering the economy away from the crisis towards growth, he faces constant comparison to his peers such as the U.S. Federal Reserve's Janet Yellen, the Bank of England's Mark Carney and the Bank of Japan's Haruhiko Kuroda. But some analysts stress that the comparison is unfair.

"It is difficult to compare Mario Draghi with Janet Yellen, Carney or Kuroda because he is in charge of a lot of countries," Naeem Aslam, chief markets analyst at Think Markets, told CNBC via email. "He has to face the music from Germany, France with respect to his policies – the two countries which have made the most noise."

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