Eurozone QE | LIAM HALLIGAN

“We have shown today that we’re not short of ammunition,” said Mario Draghi. The President of the European Central Bank, though, used the bullets he had to shoot himself – and what remains of the global economic recovery – in the foot.

On Thursday, the ECB fired its “big bazooka”. Central bankers in Frankfurt, in yet another bid to get the moribund Eurozone economy moving, created even more virtually-printed money while pushing already negative interest rates down further.

The ECB’s main refinancing rate was lowered from 0.05pc to zero, while the deposit rate dropped from -0.3pc to -0.4pc. So Eurozone commercial banks will be charged more to lodge excess reserves at the central bank, apparently encouraging them to extend loans to firms and households.

“There needs to be a certain credibility,” opined Mario Draghi, President of the European Central Bank, as he launched outright Eurozone quantitative easing last Thursday. “Today, we’re showing that such credibility is deserved”. When used by an economist, “credibility” is indeed a very important word. But I’m afraid I take issue with Signor Draghi’s usage.

When I began studying the dismal science – some 30 years ago, I’ve just realised with anguish – central bankers gained “credibility” by implementing policies which were tough over the short-term but ultimately constructive for the longer-term health of the economy.