ECB to decide on bond-buying plan for reviving eurozone economy

By Paul Carrel & John O'Donnell

The European Central Bank is poised to announce a plan on Thursday to buy government bonds, resorting to its last big policy tool for breathing life into the flagging eurozone economy and fending off deflation.

Market expectations are sky-high for the ECB to unveil a large-scale program of quantitative easing (QE) - printing money to purchase the sovereign bonds - despite opposition from Germany's Bundesbank and concerns in Berlin that this could allow spendthrift countries to slacken their economic reforms.

A eurozone source said on Wednesday that the ECB's Executive Board, which met on Tuesday, has proposed that the bank should buy 50 billion euros ($58 billion) in bonds per month from March.

The broader, 25-member policymaking Governing Council will discuss the proposal on Thursday before ECB President Mario Draghi holds a news conference at 1330 GMT.

"I expect they will deliver, and launch a QE program that will be probably larger than 500 billion (euros)," said Sassan Ghahramani, CEO of New York-based SGH Macro Advisors, which advises hedge funds.

Uncertainty surrounds the proposed program's duration. The Wall Street Journal reported it would last a minimum of one year while Bloomberg said the purchases would run until the end of 2016. The ECB declined to comment on any of the reports.

The duration is significant. A program starting in March and running for a year would total about 600 billion euros, based on a purchase rate of 50 billion per month. If a similar plan ran until the end of 2016, it could surpass 1 trillion euros.

A Reuters poll of money market traders on Monday showed they expected a 600-billion-euro bond-buy plan, though they also believed that would not...