The European Central Bank has unleashed a 60 billion euro a month quantitative easing program in effect through September 2016 or until the region sees sustained nominal gross domestic product growth. QE will lift the stock markets as risk appetite improves at a time the eurozone is benefiting from low oil prices, a weak euro and easier lending standards. However, QE is unlikely to solve all of Europe’s economic problems.

If Europe follows in the U.S. and Japan’s footsteps, QE will not likely help the eurozone achieve the European Central Bank’s 2 percent inflation target. The Bank of Japan’s balance sheet experienced hockey-stick-like growth in the trillions of dollars the past few years amid Prime Minister Shinzo Abe’s aggressive stimulus program. Japan’s stock market rallied but inflation hardly budged.

QE boosted the U.S. stock market. But inflation fell significantly after QE ended in late October amid a strengthening greenback and free falling commodities prices. Given that all commodities are traded worldwide in U.S. dollars, the Federal Reserve influences inflation globally more than any other major central bank.

Success in Europe’s QE program lies in the overleveraged European banking system, which suffers from poor balance sheets and capitalization ratios compared to U.S. banks. Results of the the ECB’s stress tests released in October found that European banks’ portfolio of non-performing assets totaled 879 billion euros and that they have estimated capital shortfall of 25 billion euros. Sascha Steffen, a professor of finance at the European School of Management and Technology, estimates they really have a 500 billion euro shortfall. Thus money flying off the ECB’s printing presses will more likely get clogged in the banking sector rather than trickle into the economy. If the ECB’s QE program helps banks improve their balance sheets, it’s a step in the right direction.

On the plus side, a weak euro should lift demand for tourism and European exports, thereby increasing margins and production. The 10% nosedive in the trade-weighted euro since May should boost eurozone GDP this year and even next even if the euro does not depreciate further, Credit Suisse wrote in a European Economics report released Jan. 23. At the same time plunging gas prices should boost consumer spending. If QE increases residential and commercial real estate values, the wealth effect will give consumers and business more confidence to spend. Residential property values stabilized late last year. Credit Suisse estimates that QE will merely add a few tenths of a percentage point to consumer spending thanks to the wealth effect, which will be limited to wealthy households.

The euro will likely weaken more, dampening the risk of deflation. Short-term interest rates will stay low for the foreseeable future and demand for credit is perking up. Long-term interest rates have room to fall further. Cheap credit encourages government spending and business borrowing. If investors cannot earn anything on risk-free bonds, they’ll be forced into the stock market.

The upshot of low interest rates will be unknown for a long time. It takes up five quarters for monetary policy to show up in GDP and up to two years to affect inflation, Credit Suisse wrote. “As a rule of thumb, a 100 basis point decrease in interest rates should boost growth by around 0.3% after around five quarters,” Credit Suisse wrote. “Given that interest rates have fallen by more than 200 basis points in the periphery since late 2013, this should point to a significant support to GDP over the next few months.”

Michael Passante is a portfolio manager at Focused Wealth Management, a registered investment advisory firm in Highland, N.Y.