The European Central Bank's monetary stimulus programme is likely to fail without full-blown bond purchases and could lead to a recession in the eurozone, Standard & Poor's has warned.
The credit rating agency said the ECB's targeted longer-term refinancing operations (TLTROs) - cheap loans to banks - only amounts to €40bn of net stimulus once old loans are repaid.
S&P chief European economist Jean-Michel Six said monetary policy doves know the plan will not work, but have signed up to it in order to show German-led opposition that all conventional measures have been exhausted.
He said: "Risks of a triple-dip recession have increased. The ECB has one last arrow and that is quantitative easing of €1trn."
In September, ECB president Mario Draghi (pictured) announced a programme of purchasing asset-backed securities, but steered clear of the full-blown quantitative easing favoured by the US and UK.
He faces opposition from the German Bundesbank. As well as reports of clashes in private between Draghi and Bundesbank head Jens Weidmann, the latter has publicly questioned the merits of buying ABS.