It's a start, but it's not a cure for Europe's deepening economic stagnation.
Borrowing from the playbook of their U.S. and Japanese counterparts, European central bankers Thursday embarked on a highly anticipated plan to buy hundreds of billions of dollars' worth of government bonds to try to revive growth by pumping cash into the financial system.
European Central Bank President Mario Draghi announced an open-ended pledge to buy 60 billion euros ($70 billion) worth of private and public bonds every month in a program that could amount to as much as a trillion euros.
The long-awaited—and, many say, long-overdue—program will start in March and last through September 2016, Draghi told reporters.
The hope is that the bond-buying spree—known as quantitative easing—will help reverse a worrisome drop in prices that has recently spread throughout the euro zone.
First tried in Japan in the early 2000s, and then deployed in 2008 by the U.S. Federal Reserve, the goal of quantitative easing is to boost growth by lowering interest rates and making cash easier and cheaper to borrow, spurring lending and spending.
In the U.S., Fed officials recently decided to end a third round of QE after sucking up more than $3 trillion in bonds. Though the Fed policy was not without critics, it is generally credited with helping to get the U.S. economy and banking system back on its feet after the worst financial crisis since the Great Depression.
Europe is not alone in facing the perils of falling prices and economic slowdown. Outside the U.S., the rest of the world's economy is grappling with dropping prices and slower growth. While the recent crash in oil prices has accelerated the trend, prices of raw materials and natural resources have been falling since the Great Recession ended.