Thursday’s European Central Bank meeting is shaping up to be critical.

Last week’s news headlines were dominated by hawks on the bank’s governing council pushing back against the restart of quantitative easing. It’s a sure sign that Mario Draghi, the soon-to-depart ECB president, is readying the bond-buying bazooka once again.

He has little choice but to ignore the protests of Germany, France and the Netherlands. As central banks around the world race to cut interest rates, this is no time for the ECB to dither. Europe’s manufacturers (Germany’s especially) are struggling with the impact of the U.S.-China trade war and Draghi simply cannot afford to let the euro strengthen.

The currency has been gaining against the pound and, more importantly, the Chinese yuan. One blessing is that the dollar has stayed surprisingly strong. But one of the best forward indicators of U.S. growth, the manufacturing ISM report, has weakened. If the American economy really does start wilting, the dollar will finally follow. That could be calamitous for the downturn-threatened euro area.

As Germany’s manufacturing sector falls further into recession, Draghi’s hand has been forced. Last month, Finnish central bank chief Olli Rehn called for a significant stimulus, and the euro area’s economic data has worsened subsequently.

It’s notable that the hawks’ complaints have been about restarting QE only, with barely a squeak against cutting rates. This is no doubt an acknowledgement that something has to be done to stop the euro from rising.

One can certainly sympathize with the hawkish view that more QE now will be largely meaningless in actual economic impact. Germany, along with the rest of Europe to an increasing degree, is really suffering from an external problem: a sharp drop in manufacturing export orders. The ECB swallowing up even more government bonds isn’t going to solve this, and weakening the euro through lower interest rates is merely a sticking plaster that inflicts collateral damage on Europe’s banks (who find it hard to make a profit on ultra-low rates). 

Only a committed shift to fiscal stimulus would really offer any meaningful impetus for growth. Unfortunately that remains a political fantasy for now — ironically, one that the Germans are best placed to make reality by using ultra-cheap money to fund domestic infrastructure spending.

So you can see why Draghi and his successor Christine Lagarde are boxed in on pursuing their “ultra-accommodative” policies. Not restarting QE would signal that the ECB really has run out of ammunition. David Powell, a Bloomberg economist, expects about 45 billion euros ($49.6 billion) of new monthly bond purchases to be announced.

Lagarde laid out her manifesto to the European Parliament last week, making clear that the ECB needs a renewed monetary policy framework. That’s code for raising the inflation target from just below 2%, maybe to something closer to 2.5%. This is why current and future ECB presidents will argue for more QE, with the bank struggling at present to keep inflation above 1%.

Interestingly, Lagarde also highlighted that any new asset purchases will emphasize green bonds, which are used to fund climate-related projects. It’s a neat way potentially of getting around some headroom restrictions in the ECB’s existing bond holdings. 

Despite the protests of the Bundesbank and others against QE, the market knows they’re just indulging in the central bank equivalent of virtue signaling. With the euro zone flirting with recession, more bond-buying and more negative rates are coming. They’re the only options available.

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Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. He spent three decades in the banking industry, most recently as chief markets strategist at Haitong Securities in London.

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