The markets have already decided, the ECB will do QE on the 22 Jan 2015. The decision to change the venue from Cyprus to Frankfurt and the Mario Draghi New Year speech cementing this view with the EURO down from the before the speech 1.25 levels.

What did Mario Say ?

- The risk that we do not fulfill our mandate of price stability is higher than six months ago.

- We are in technical preparations to adjust the size, speed and compositions of our measures early 2015, should it become necessary to react to a too long period of low inflation. There is unanimity within the Governing Council on this.

- Concerns are that weaker price expectations could affect wages and investments and dampen growth prospects.

- A break-up of the euro zone? That will not happen. That's why there is no plan B

Well lets consider his arguments

ECB mandate of low inflation.

His mandate is for inflation not to go above 2 pct for an extended period of time. Currently EU inflation is at 0.6 pct. His mandate has been fulfilled.

The mandate is really of price stability, so that prices may reflect the true preferences and productive limitations of the market in order to allocate scarce resources to where they are needed the most.

Draghi seems to think that negative inflation is a bad thing and thus must be avoided. As the EU will be in negative inflation he wants to print to produce inflation. This is ridiculous. 

Is deflation is harmful ?

 No, not in this case. The fall in prices is caused by a fall in Crude Oil prices. The EU is a net importer of crude oil,  thus the EU's trade surplus will only crease. Also falling petrol prices will have a double positive effect on the economy as consumers have will have more money to spend and goods will become cheaper due to lower transport and distribution costs. 

In a economy with increasing productivity,  prices will fall, benefiting all of society. Preventing prices from falling or, as ECB President Draghi desires, encouraging price inflation, causes the Cantillon Effect, whereby early receivers of the new money benefit at the expense of later receivers.

Unlike the Fed the ECB has no mandate for Growth.

QE for Europe will not automatically result in higher growth. First, the QE is designed to buy Government bonds. This will not help workers get higher wages nor increase industrial production. It hill help governments to slow down their reforms and produce a balanced budget.

Secondly more money will only create inflation and higher nominal GDP growth not PROSPERITY. Ask Zimbabwe, they had great QE resulting in fen-nominal GDP growth ( and inflation) are they better off ? 

Thirdly, money expansion increases the miscalculation of resources and enhances the boom bust cycle.  The current collapse of commodity prices and anticipated bankruptcies in commodity production industries are a good illustration of this process and are attributable to massive monetary expansion by central banks since the 2008 great recession. 

What makes Draghi think it will be different for the ECB ?