The ECB's taken heat from critics who say it's been too slow to cut its key rate amid a recession that's likely to be continental Europe's worst since World War II. The Fed has lowered its key rate to near zero and the Bank of England has signaled its policy rate will fall below the current 1%, already the lowest since the bank's founding in 1694. Both central banks are also aiming to boost growth by purchasing some assets directly.

The ECB, by contrast, is still at 2%. The central bank of the 16 euro-zone nations is very likely to lop a half percentage-point off that official rate at its next meeting March 5, taking the rate to the lowest in the bank's 10-year history. But that's still high compared to other major central banks, and just how quickly the ECB will move afterward is unclear.

And while the ECB looks likely to debut some new programs soon - perhaps by expanding the range of collateral it accepts in return for the short-term loans it makes to banks, perhaps by moving to purchase some assets such as corporate debt directly - some policy makers have signaled deep discomfort with such steps.

Part of the reason: the ECB's already thinking about the next crisis. In a speech in Brussels Monday, ECB President Jean-Claude Trichet stressed that solutions aimed at containing today's crisis shouldn't lay the groundwork for tomorrow's.

'It is important that policies do not steer the global economy back to the global imbalances experienced in the status quo ante, since this was the starting point of the current problems,' said Trichet. 'It is of the utmost importance that policymakers do not merely focus on short-term solutions and instead adopt a longer-term perspective, with the objective of ensuring a sustained recovery.'

The 66 year-old Frenchman outlined two tenets of his long-term approach: First, policymakers should have a clear plan for extracting themselves from extraordinary crisis-time measures - a so-called 'exit strategy.'

And crisis-resolution policies shouldn't only be about boosting 'domestic demand in the short run,' but also about 'fostering longer-term structural adjustments.' Translation: Policies that lay the groundwork for a return to the debt-fueled boom years that preceded today's bust are the wrong way to go. That suggests the ECB's likely to keep moving cautiously as it lowers its key rate.

Policymakers' aim to be prudent could yet be overtaken by events, of course. The IMF now forecasts the euro-zone economy's likely to contract by 2% this year; many economists see unemployment, which hit a two-year high of 8% in December, in double-digits by 2010. Some economists see the ECB's key rate at 0.5% by June.

And the ECB's 22-member Governing Council is not united in its resolve to move cautiously. Within the diverse group - each member of which gets an equal say in rate-setting decisions - there is a view that the euro-zone economy would be better off if rates were already at 1%.

Joellen Perry

在