The European Central Bank has been very strong support for the economy for years, she finds herself cornered to act once again Thursday, despite its internal debates, as the situation remains fragile in the euro zone.
Lower rates, new buybacks of public and private debt, tapering system and giant loans to relieve the bank: the institute could announce not less than four measures simultaneously, a "package" watched all summer by the financial markets .
Six weeks ago, Mario Draghi, the Italian president of the monetary institute, had deemed it necessary to keep a "significant degree of monetary stimulus" in the face of the cyclical cold, especially noticeable in Germany, against the backdrop of a commercial war between China and the United States.
The climate has not improved since then, so the institute "will not hesitate to announce strong measures", predicts Eric Bourguignon, leader at Swiss Life Asset Management, even if the ECB's room for maneuver has been plagued by years of support for the economy.
Especially since before completing his eight-year term at the end of October, Mr Draghi should prepare a smooth transition with the outgoing director of the International Monetary Fund, the French Christine Lagarde.
- Counter Trump -
If the ECB "was to disappoint in September, it would have to do more later, with reduced chances of success," said Frédéric Ducrozet, strategist at Pictet Wealth Management.
Even if the institute delivers the expected cocktail on Thursday, the reactions could be sharp: by weighing on the price of the euro against the dollar, such measures "could be perceived by the President of the United States as anti-competitive behavior of the ECB, "according to Chiara Zangarelli, economist at Nomura Bank.
And the risk is not only to trigger on Twitter the wrath of Donald Trump, but especially to see his administration "focus on customs tariffs" hitting car imports, a file reported to Washington by November and which threatens especially German builders.
Whatever happens, the ECB will have to overcome the dissensions created this summer in its Board of Governors, divided on the opportunity to exit now the big monetary game.
The institute in Frankfurt will be able to rely on new economic forecasts, while those in June forecast inflation of 1.3% in the euro area in 2019 and 1.6% by 2021, still far from the objective of the ECB "close to 2%" in the medium term.
At a minimum, the ECB should leave its bank refinancing rate at zero, and it is clear to observers that it will lower the deposit rate.
- Compromise on the purchase of debt? -
Already 0.40% negative, it amounts to taxing the banks for the cash they choose to entrust to the Central Bank rather than lending to businesses and households.
In parallel could be announced a tiered rate system to reduce the interest burden for more than 7 billion per year on banks.
But the most delicate will be to revive the purchase of debt, the famous "Quantitative Easing" or "QE" put to sleep at the end of 2018. Several central bankers, including the German Jens Weidmann and the Dutchman Klaas Knot, have publicly opposed .
"A total envelope of 600 billion euros would be justified today," however judges Frederik Ducrozet, but internal debates at the ECB "suggest to do less".
The institute will also confirm the new wave from September 19 of giant loans to banks, allocated on preferential terms, to stimulate the distribution of credit in the economy.
Finally, the ECB could adjust the communication on its intentions, designed to steer investors' expectations to avoid swerving on the markets and preserve its credibility.
© 2019 AFP