Mario Draghi is discovering that confidence in the euro area comes at a cost. Since the European Central Bank president talked up the economic outlook last month and signaled that the worst of the debt crisis is over, the euro has surged to a 14-month high against the dollar. Banks have fueled the euro’s rally by paying back more emergency loans than forecast, shrinking the ECB’s balance sheet just as the Federal Reserve and the Bank of Japan expand theirs. That’s threatening to stymie Europe’s recovery before it has begun, highlighting the tightrope Draghi is walking as he seeks to boost confidence without ... (full story)