Taken together, the measures amount to a modest stimulus to the economy now, with the promise of a gradually larger one over the next two years. Financial markets’ initial reaction to the news was enthusiastic, but faded as it became clear how much of the stimulus was post-dated. The euro ended the day in Europe over half a cent above its opening level against the dollar at $1.365. Stocks on both sides of the Atlantic rallied.

The ECB cut the main rate at which banks borrow from it by 0.10 percentage points to 0.15% and, in a more radical move, cut the rate on its overnight deposit facility to -0.10% from zero. That means the ECB will essentially be charging they park excess cash there, aiming to force them to put their money to work more effectively in the real economy. Although smaller countries, such as Denmark and Sweden, have experimented with negative interest rates, this is the first time that one of the world’s acknowledged major central banks has resorted to such an extreme step.

At his monthly press conference later, ECB President Mario Draghi announced an injection of around €164 billion ($223 billion) of extra liquidity into the banking system by scrapping a weekly auction of deposits, a move that should lower money-market rates and, in turn, the euro’s exchange rate. He also laid out plans to offer banks up to €400 billion in cheap long-term funding at two long-term credit  tenders  in September and December, plus additional operations every quarter for 18 months after that. Access to the funds will be tied to banks’ lending to businesses and households. Home loans, which were the biggest factor behind the financial crisis in Spain and Ireland six years ago, won’t be eligible for the scheme, nor will banks’ holdings of government bonds.

But Draghi stopped short of announcing a major program of bond purchases akin to the ‘quantitative easing’ programs of the Federal Reserve, Bank of Japan and and Bank of England. He said nothing about buying government debt and said the ECB’s plan to buy large amounts of asset-backed securities from banks was still a work in progress.

That’s nowhere near enough what some economists think is needed to jolt the eurozone out of its funk, the way that the Bank of Japan has done in the last year. Kim Schoenholtz. a professor at NYU Stern School of Business, said that, to make a real difference, the ECB would have to buy around €1 trillion in assets, but said that would involve buying all manner of low-quality debt and would trigger yet another political storm.

“Unfortunately, it’s very difficult for them to have a substantial impact without breaking glass,” Schoenholtz said.

Draghi said that more measures would come if necessary, but said that the ECB probably wouldn’t cut interest rates any lower.

“For all practical purposes, we are already at the lower bound,” Draghi said.

He admitted that the measures on their own wouldn’t be enough to turn the euro zone’s fortunes round, calling again on governments to cut taxes and finish other structural reforms to encourage growth. Although it emerged from recession over a year ago, the eurozone’s economy has failed to gain traction, crawling along at a miserable 0.2% in the first quarter of this year. The ECB cut its forecast for growth this year to a meager 1.0% Thursday, and said inflation would continue to undershoot its 2% target for the next two and a half years. Preliminary figures from Eurostat earlier this week showed prices rose only 0.5% in the year to May.

The ECB’s move was welcomed by the International Monetary Fund and by French President Francois Hollande, but was lambasted in Germany.

“This is a desperate attempt, with ever cheaper money and penalty rates on deposits, to divert capital flows to southern Europe,” said Prof.  Hans-Werner Sinn, an economist with the ifo research institute in Munich.