ECB’s Draghi Injects 1 Trillion Euros into Europe

Mario Draghi threw one trillion euros at Europe’s faltering economy Thursday and told people to stop blaming the central bank for the hardship they feel.  The president of the European Central Bank was unveiling details of a program that is aimed at stimulating the economy by getting banks to lend more to European companies and consumers.

Loans and mortgages worth as much as one trillion euros ($1.3 trillion) — including some junk-rated assets from Greece and Cyprus — qualify as assets that will be purchased by the ECB over two years. There are conditions attached and no guarantee that the central bank will buy them all.  The stimulus measures were announced in early September, alongside the bank’s second interest rate cut this year. The ECB will start buying some of the assets later this month.

The ECB has taken a series of bold policy steps into uncharted territory this year, driven by concern that current very low inflation may turn into a vicious circle of falling prices and economic stagnation similar to the fate Japan suffered in the 1990s.  But the outlook has worsened still further in recent weeks, with inflation across the eurozone falling to just 0.3% in September.


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