BRUSSELS - The European Central Bank slashed interest rates to a historic low and unveiled a raft of bond-buying emergency stimulus programmes, in a move that surprised financial markets and analysts.

The emergency stimulus measures are not enough to counter the austerity that has Europe in a worse mess than the Great Depression, say analysts.

The European Central Bank move surprised markets as it cut its target short-term interest rate to basically zero. ECB also plans to buy a bunch of bonds to push longer-term rates lower, too -- an echo of the U.S. Federal Reserve's many rounds of "quantitative easing," used in recent years to goose the economy (or at least the stock market), says the Huffington Post.

The Frankfurt-based bank cut the eurozone's basic interest rate by 0.1 percent or 10 basis points from 0.15 percent to 0.05 percent on Thursday and its other interest rates by 0.1 percent across the board.

It will also launch an asset purchase programme to buy debt products from banks starting after the next meeting of its governing council meeting on 2 October.

However, it shied away from a fully-fledged programme of buying government bonds, known as quantitative easing.

Speaking at a press conference after the ECB's monthly governing council meeting, European Central Bank president Mario Draghi said that the measures would support the provision of credit to businesses.

The programmes would have "a sizeable impact on our balance sheet", Draghi said, adding that giving a precise estimate of how much it would cost the bank was "very, very complicated" as the aim is to increase the measures that produce credit easing.

ECB boss Mario Draghi said that QE had been discussed by the bank.

"Some of our governing council members were in favour of doing more than what I've just presented, and some were in favour of doing less," he said.

"So our proposal strikes the mid-road.... a broad asset purchase programme was discussed, and some governors made clear that they would like to do more."

Draghi announced the ECB would purchase asset-backed securities (ABS) and covered bonds to boost the economy and boost inflation.

"This is quite a complex package of measures," Draghi told assembled journalists.

"The purpose is very different from previous programmes... the aim is to increase the measures that produce credit-easing and also to significantly stir the size of our balance sheet towards the dimensions it used to have at the beginning of 2012."

On Thursday, Draghi said the ECB had downgraded its euro zone growth forecasts for 2014 and 2015, to 0.9 percent and 1.6 percent respectively.

Draghi added that growth in the second quarter had been weaker than expected and that incoming third-quarter data suggested slowing economic recovery.

Official interest rates were cut to an historic low of 0.25 percent in November 2013. Then on 5 June this year, the central bank shaved another 10 points off the official rates tier taking them to 0.15 percent. Draghi said Thursday the ECB did not intend to cut interest rates any further.