FRANKFURT, Germany — Europe’s ailing economy will get a major dose of stimulus from the European Central Bank — a bond buying program designed to make loans and exports cheaper so companies can hire and expand.
Starting in March, the ECB will buy $68.3 billion of government and corporate bonds each month at least through September 2016.
The 1.1 trillion-euro program was an emphatic signal of the ECB’s willingness to do all it can to rejuvenate the economy shared by the 19-nation euro currency alliance.
ECB president Mario Draghi pledged Thursday to extend the bond buying if needed until the bank saw a significant upturn in the eurozone’s excessively low inflation, which threatens to become a downward spiral.
Stocks rallied in Europe and the United States after the announcement, with the Dow Jones industrial average jumping 259 points, or 1.5 percent. The euro’s value, meanwhile, plunged nearly 2 percent against the dollar to its lowest level in 11 years in anticipation that the ECB’s bond purchases will drive down the currency.
The ECB’s purchases will flood the economy with money that the central bank will create — a power it wields as the euro’s legal issuer. Its chief mandate is to maintain price stability. It’s fallen short of its goal of 2 percent annual inflation, considered consistent with a healthy economy. The current rate is minus 0.2 percent.
The eurozone is working off a crisis over excessive government debt in countries like Greece, Portugal and Ireland. The alliance’s economy has lagged even as the United States and Britain have recovered more robustly.
