Draghi stimulus to get Europe going

ECB urges continued spending to achieve sustained adjustment in the rate of inflation

Mario Draghi has delivered a classic European compromise. It even has a chance of working.

With a headline value of 1.1 trillion euros ($1.3 trillion) over at least one and a half years, the quantitative-easing package unveiled by the ECB president on Thursday was welcomed by investors, even with its concessions to critics and a flurry of fine print. Draghi pledged to keep spending until there is a "sustained adjustment in the path of inflation".

The euro fell, and stocks and bonds rose after the long-awaited arrival of a mode of stimulus that central banks in the rest of the developed world adopted years ago. Draghi said the plan will help return inflation to the ECB's goal, while still giving a nod to the Germanled concerns that defined much of the region's response to the financial crisis.

"It's a good start on a long road," said Kenneth Rogoff, professor of public policy and economics at Harvard University. "They seem to have exceeded market expectations instead of underperformed, and that's good. It's clear that it had to be open-ended to raise inflation expectations."

Investors agreed the program is sufficient, for now, with a gauge of inflation expectations rallying. The Stoxx Europe 600 Index surged 1.7 percent to extend a seven-year high and bond yields declined from Germany to Spain. The euro weakened to an 11-year low against the dollar to as low as $1.1316.

The monthly purchases of 60 billion euros through September 2016 will probably comprise about 45 billion euros in investment-grade sovereign bonds, 5 billion euros in the debt of euro-area public agencies and 10 billion euros under existing programs to buy asset-backed securities and covered bonds, a euro-area official said.