Mario Draghi wanted everyone to understand on Thursday that the European Central Bank was determined to honor its prime directive: keeping inflation, now dangerously low, in check. “We have a mandate. We don’t tolerate prolonged deviations from our mandate,” Mr. Draghi, the bank’s president, said at a news conference. “Not to pursue our mandate would be illegal.”
But it has been almost two years since the eurozone’s central bank last achieved its inflation target of about 2 percent. Inflation has fallen steadily since then, and it is now close to zero. Mr. Draghi and the central bank did not take concrete action on Thursday. Instead, he offered assurances that more aggressive stimulus was just around the corner, perhaps the type of large-scale bond purchases used by the United States Federal Reserve.
The question is how long the European Central Bank and Mr. Draghi can merely hint at actions yet to come. There were already signs of doubt on Thursday, as European stocks were down broadly even before Mr. Draghi’s news conference ended. “At some point, they will lose credibility,” said Mark Zandi, chief economist at Moody’s Analytics. “They still have time, but time is running out.”