Most Indications Are That QE Will Be Announced In March Next Year.

As the European economic engine, Germany refuses to launch fiscal stimulus, while other governments are busy with economic reform, the task of boosting the economy and resisting deflation is now on the shoulders of the European Central Bank.

The situation is becoming more urgent.

The euro area inflation rate fell to 0.3% in November, far below the European Central Bank's slightly lower than 2% target and in the central bank's "dangerous area".

At the same time, economic growth has stagnated, and some euro zone countries have fallen into recession. The euro zone is barely above the recession level.

Buying through banknote printing

The quantitative easing (QE) measures can theoretically boost inflation and promote economic growth.

Mario Draghi, the European central bank governor, opened the door for stronger incentives in his speech in November 21st.

Vice President Constancio (Vitor Constancio) said last week that the central bank is best able to assess whether it wants to buy sovereign debt in the first quarter.

"It seems too early to make such an assessment," Constancio said. "But in early 2015, we must examine and assess whether the current plan has produced the desired results."

This has led many to expect the ECB to introduce the QE policy at its March 5th session.

In December and January before March, people thought it was too early; after March, some people thought it might be too late.

The European Central Bank has begun to buy guaranteed bonds and ABS, trying to stimulate these markets and create new financing operations for smaller businesses, expand the size of the central bank's balance sheet, or increase the amount of capital injected into the economy.

But these measures may not allow the central bank to do so.

When the scale expanded to the level of early 2012, it was about 1 trillion euros more than today.

Within the European Central Bank, the size of the balance sheet determines whether to launch.

Key factors.

When the ECB held its December policy meeting on Thursday, Delaki's comments and the latest forecasts of the European Central Bank would be carefully scrutinize, but for the European Central Bank, it is still too early to decide QE this week.

The Reuters poll released on Monday showed no one expected to take action at this week's meeting.

Before action, policymakers first want to assess the effect of the ABS purchase measures that just started last month, and the need for the European Central Bank to provide new loans to banks on 11 December.

After the meeting on Thursday, the ECB's next opportunity to launch the QE will be the first monetary policy meeting in 2015 in January 22nd, but it will probably not be enough time to reach a consensus before that.

Since the management committee will hold only eight meetings next year instead of 12, the next meeting will be held in March 5th.