EUROPEAN Central Bank (ECB) President Mario Draghi has moved closer to launching sovereign debt purchases and data this week will show just how dangerously low inflation has fallen in the US$13 trillion eurozone economy.

    A sickly Europe has held back global economic growth for years, and now it is contributing significantly to powerful forces already dragging down inflation across the globe.

    A spectacular drop in crude oil prices over the past month will be the center of discussion when ministers from the world’s top oil exporters meet in Vienna on Friday.

    The key question there is whether Saudi Arabia, which signaled last month it was comfortable with lower oil prices, accelerating a plunge in the price of crude to a third since June, will stick to that view.

    But rapidly-increasing U.S. oil production, coinciding with shaky demand from China and Europe, is likely to keep a lid on the price no matter what the Organization of Petroleum Exporting Countries (OPEC) decides.

    The latest Reuters poll suggests eurozone inflation relapsed to 0.3 percent in November, far from the ECB target of just below 2 percent.

    “It is essential to bring back inflation to target and without delay,” Draghi said Friday.

    “Monetary policy can and will do its part to achieve this. But it is also clear that, as monetary policy works on the demand side of the economy, other policies can assist in this process — or at least not counteract it.”

    After many years of austerity, Draghi and others have come around to the idea of loosening fiscal policy to invest in infrastructure. But Germany, which could best afford it, is focused on balancing its books for the first time since 1969.

    Despite years of zero interest rates across mature economies and trillions of dollars worth of emergency stimulus from central banks, alarm bells are ringing worldwide.

    Japan’s experiment in raising sales taxes to try to revive inflation spawned news of yet another recession.

    The ECB, with rates as low they can go, has been doing everything in its power short of printing money — an option staunchly opposed by Germany.

    Yet private credit figures this week may once again fail to show any real impact from the cheap long-term loans the ECB has offered banks to lend on to businesses ECONEZ.

    Bank credit to the private sector has been contracting for more than two years and the few economists who gave a forecast expect another roughly 1 percent fall compared with a year ago.(SD-Agencies)