The European Central Bank surprised the markets yesterday by unleashing a massive stimulus package, in what market is describing as a last ditch attempt to kick start the Eurozone economy.

ECB president, Mario Draghi announced the bank is to cut its deposit rate by 10 basis points, expand its quantitative easing program by a further 20 billion euros a month and in an extreme move, start purchasing corporate debt. Draghi pledged he will continue to pump money into the system to stop the continent falling into a deflationary spiral.

The markets reacted negatively with equity markets falling on fears the ECB has now exhausted all its policy options.

These are desperate measures and another sign the current monetary system is not functioning. The European economy is weighed down with debt unable to generate jobs and locked into a political union which is starting to unravel. Quantitative easing and negative rates have not worked so far, so why does Draghi and the ECB thinks doubling down on a failed policy is the answer?