By Simon Nixon 

What was Mario Draghi up to? Even 10 days after the European Central Bank chief's speech at the annual central bankers' jamboree at Jackson Hole, nobody is quite sure--not the markets, nor policy makers in Berlin, Brussels, Paris, nor even many of his colleagues.

To most observers, his call for governments to allow fiscal policy to play a greater role in pulling the currency bloc out of its slump came out of a clear blue sky. Like most central bankers, Mr. Draghi has tended to avoid commenting on fiscal policy beyond emphasizing the need to maintain the credibility of the euro zone's fiscal rules. Yet here he was apparently calling time on the euro zone's austerity policies.

To add to the puzzle, no data had emerged over the summer to trigger such a dramatic change of tone. Certainly, second-quarter growth was weaker than expected and growth forecasts for this year and next are being pared back. Headline inflation also fell to just 0.3% in July, but this largely reflected falling oil prices, which should boost consumer spending; importantly, core inflation actually rose to 0.9%. The euro has fallen 5% since the start of the summer on a trade-weighted basis, providing a further boost. Most economists expect the ECB to downgrade its inflation forecast next week, but not by much.

Yet perhaps Mr. Draghi's U-turn should not have come as such a surprise. Over the summer, he appears to have become increasingly disillusioned with the institutional setup of the euro zone, which he clearly thinks isn't adequate to meet the economic challenges it faces.

In July, he made a hard-hitting speech calling for Brussels to be given new powers to oversee structural reforms in member states. That was an implicit acknowledgment that he fears political institutions in some countries may be simply too weak to overcome vested interests. This latest call for governments to coordinate their fiscal policies to boost aggregate euro-zone demand fits a similar pattern.

The principal rationale for any political union is its ability to absorb shocks and spread risks. Other things being equal, that should allow it to sustain higher debt at lower cost, boosting overall prosperity. But in the euro zone, other things aren't equal. Despite efforts to improve risk-sharing via the new bailout funds and the creation of a banking union, its individual members have fewer tools to absorb shocks than independent states. In the absence of a true political union, the long-term cohesion of the currency union depends largely on its members self-insuring against shocks by reducing their debt and boosting competitiveness--creating what Bundesbank President Jens Weidmann has dubbed a "stability union."

Is Mr. Draghi losing faith in the euro zone's ability to sustain a stability union? He has good reason. Look at what has happened since he took the markets by surprise with his 2012 "whatever it takes" speech.

Back then, newly-elected French President François Hollande had just announced that he intended to honor ill-judged manifesto pledges to raise taxes and lower pension ages that had been demanded by his party's left-wing. The result was to crush confidence, snuff out the recovery and drive up unemployment to a record high of 10.3% in July.

By January this year, Mr. Hollande recognized his mistake and embraced reform. But it took him until last week to complete the U-turn, with the purging of anti-reform left-wing ministers from the cabinet. Meanwhile, two years have been wasted.

It is the same in Italy. In July 2012, Prime Minister Mario Monti had just agreed a deal with parliament on watered down labor reform after six bruising months of negotiation. The experience exhausted his political capital. Although his government limped on for another nine months, he attempted no further major reforms. His successor, Enrico Letta, spent nine fruitless months seeking a deal on electoral reform while the economy stagnated, before being replaced this year by Matteo Renzi who also spent his first five months pursuing political reform.

Mr. Renzi has just announced an economic reform package. But the cost of Italy's two lost years has been immense.

The result is that the euro zone is barely in better shape to absorb a major shock than two years ago--just as it faces potentially major shocks from geopolitical tensions along its Eastern and Southern borders. Debt-to-GDP ratios are higher than two years ago, euro-zone unemployment is flat, compared with last year, and there is a risk of outright deflation. The lack of growth in Germany, France and Italy, its three biggest economies, is placing a cap on euro-area growth that no amount of reform-led growth in countries such as Spain, Ireland and Portugal can overcome.

The message of Mr. Draghi's Jackson Hole speech is that he thinks the euro zone's growth challenge is now so serious that it needs to act more like a political union in both fiscal and monetary policy as well as in the oversight of structural reforms to spread risks and absorb shocks.

That risks setting him on a potential collision course with Berlin--already alarmed at Mr. Draghi's self-proclaimed willingness to embark on a large-scale government bond-buying program, which German officials warn will inevitably be challenged in the constitutional court. Officials fear that Mr. Draghi's call for greater coordination of national fiscal policies was a not-so-coded call for Germany to abandon its own debt reduction strategy and embark on a fiscal stimulus program, something Berlin is sure to resist.

It also potentially puts him at odds with officials in Brussels, alarmed at his use of the politically-charged "F-word"--adopting the same language used by the French and Italian governments for greater "flexibility" in interpreting the fiscal rules. Officials in Brussels and Berlin are resigned to a face-saving deal with France and possibly Italy over their deficit limits, potentially using the Ukraine crisis as an excuse. But they are pushing hard for big reform and spending commitments in return.

Mr. Draghi will have a chance to clarify his position at his monthly news conference this week. But he has set the stage for a politically turbulent few months. If another major shocks materializes, the euro zone will have to bind further together or risk being blown apart.

Write to Simon Nixon at simon.nixon@wsj.com