Thousands of anti-austerity demonstrators rallied in Naples Thursday as the European Central Bank convened in the Italian city to discuss how to avert looming deflation in the eurozone.
"Misery, poverty, unemployment, speculation, free us from the ECB," read banners brandished by many of the estimated 4,000 protestors.
Under the watchful gaze of some 2,000 police and security officers, the "Block BCE" demonstration remained peaceful.
The protestors carried placards with caricatures of German Chancellor Angela Merkel, a champion of fiscal discipline in the eurozone, and the slogan "jatevenne" which is Neopolitan dialect for "go away".
Police helicopters circled the Capodimonte museum where the governors were meeting, away from their usual venue at the ECB's Frankfurt headquarters.
ECB president Mario Draghi, an Italian who has earned the nickname "super Mario" for his negotiating and communication skills, was scheduled to give a press conference after the regular monthly policy meeting.
And following a surprise rate cut last month, no new policy moves were expected this time round.
Nevertheless, financial markets are looking for more details about the bank's controversial moves to inject liquidity into the eurozone economy.These include plans to buy asset-backed securities (ABS) and covered bonds as a way of kick-starting lending in the 18 countries that share the euro.
According to new data this week, eurozone inflation slowed to 0.3 percent, the lowest level for nearly five years, in September.
That, together with weak eurozone manufacturing data on Wednesday, has turned up the pressure for even more action to avert the threat of deflation -- a vicious downward spiral of falling prices and demand which central banks have great difficulty reversing.
"No matter what the ECB tries, the eurozone economy is not really reacting and instead continues to flirt with stagnation," said ING DiBa economist Carsten Brzeski.
"As a consequence, speculation about further monetary policy action has again increased," Brzeski said.
But he, too, believed that following last month's raft of measures the ECB will only announce the details of its asset-backed securities (ABS) initiative.
Asset-backed securities are bundles of individual loans such as mortgages, auto credit and credit-card debt which are sold on to investors, allowing banks to share the risk of default and freeing up funds to offer more credit.
- Reservations about ABS -
The ECB believes that the market for such securities -- an important source of financing for banks to keep lending to small and medium-sized enterprises -- has effectively dried up since the financial crisis.
And the ECB hopes that by buying them on a large scale, it can help revive the market and free up some of the credit channels which have seized up during the long years of crisis.
The problem is that it was precisely complex financial derivatives such as ABS which are seen as the root of the sub-prime crisis in the United States in 2008, leading many observers, particularly in Germany, to harbour deep reservations about them.
Some analysts are also unconvinced that the ABS programme would be big enough to solve the problem of depressed credit activity.
But Richard Barwell at RSB said such reservations missed the point.
"The creation of the scheme should encourage issuance, expanding the pool from which the ECB can buy," Barwell argued. He said it was a case of "build it and they will come".
- Disappointing uptake of loans -
UniCredit economist Marco Valli estimated the initial amount of any ABS programme at 550-650 billion euros.
Another of the ECB's liquidity measures, the so-called Targeted Long-Term Refinancing Operation (TLTRO) under which the central bank made ultra-cheap loans available to banks to lend on to businesses, disappointed market expectations.
Valli at UniCredit suggested that the low uptake last month at the initial auction was attributable to banks getting their balance sheets in order for the eurozone asset quality review and eurozone stress tests and that said they will likely tap it later.
The euro has dropped sharply against the dollar since the last measures were announced and while the ECB insists it has no exchange rate target, that is likely to come as some relief to the central bank, analysts said.
"The fall reduces the tail risk of deflation further," said May at Oxford Economics.