ECB Battle

Big Fight for Small Gain

Draghi ECB HB
Face off at the ECB. Mario Draghi and Sabine Lautenschläger.
  • Why it matters

    Why it matters

    A public spat over how to rescue the euro zone’s economy could significantly weaken the Frankfurt-based ECB.

  • Facts


    • The European Central Bank may start an ambitious plan to buy government bonds in the first months of next year.
    • As many as six ECB council members oppose the plan, sources say.
    • Annual inflation in the euro zone fell to 0.3 percent in November – well below the ECB’s target of 2 percent – and could fall to 0 percent in January.
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Mario Draghi is preparing his most ambitious step yet to revive the euro zone’s moribund economy – and many say it will be dead on arrival.

The plan by the European Central Bank’s president to buy hundreds of billions of euros worth of government bonds in the 18-nation euro zone could begin as early as next year, analysts told Handelsblatt.

It is a last gasp effort by Mr. Draghi and the ECB to right the European ship and end the continent’s economic doldrums.

While the euro zone is out of recession for the moment, growth in the currency bloc has remained well below 1 percent. Economists at Germany’s Commerzbank are predicting that inflation could fall to zero percent in January from its current 0.3 percent, bringing deflation – the current archenemy of global economists – ever closer.

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