The European Central Bank will unveil record low interest rates and other ways to pull euro zone members from their worst recession in six decades at a landmark meeting later this week.
In addition to lowering the bank's benchmark lending rate by a quarter point to an all-time low of 1% and pledging to keep it there for a while, analysts think the ECB will extend the length of its unlimited loans to banks from six months to one year.
The central bank will have cut its main rate by 3.25 percentage points in seven stages since October, and several ECB governors have indicated that 1% is as low as they are prepared to go.
That means the bank must also use unconventional means of boosting euro zone lending, and ECB president Jean-Claude Trichet pledged early last month to reveal such measures on Thursday.
'The present circumstances are extraordinary. Central banks and governments must therefore resort to extraordinary measures,' he said in a German press interview last week.
The euro zone economy will contract by 4.2% this year as Europe suffers its worst recession since World War II, the International Monetary Fund has said in a dramatic mark-down of its previous forecast.
The US Federal Reserve and Bank of Japan have cut their main interest rates to essentially zero, while the Bank of England's is currently at 0.5%.
The Fed has also embarked upon a vast programme to purchase Treasury debt and other securities, while the BoE's version of this monetary procedure, known as quantitative easing, is to buy government bonds from banks to kick-start lending and ease a credit squeeze.
ECB governors have been more cautious than peers at other central banks however, and some may point to positive economic indicators to justify not taking bolder steps this week.
Euro zone business and consumer confidence rose in April for the first time in nearly two years, and the purchasing manager's index (PMI) compiled by data and research group Markit rose to its highest level in six months. Inflation remained at 0.6% in April, meanwhile, the lowest point on records going back to 1996.
