The European Central Bank’s Objective

Posted by admin on February 10, 2010 under Central Bank | Read the First Comment

Objective The primary objective of the ECB’s monetary policy is to maintain price stability. The ECB aims at inflation rates of below, but close to, 2% over the medium term.

To maintain price stability is the primary objective of the Eurosystem and of the single monetary policy for which it is responsible. This is laid down in the Treaty establishing the European Community, Article 105 (1).

“Without prejudice to the objective of price stability”, the Eurosystem will also “support the general economic policies in the Community with a view to contributing to the achievement of the objectives of the Community”. These include a “high level of employment” and “sustainable and non-inflationary growth”.

The Treaty establishes a clear hierarchy of objectives for the Eurosystem. It assigns overriding importance to price stability. The Treaty makes clear that ensuring price stability is the most important contribution that monetary policy can make to achieve a favourable economic environment and a high level of employment.

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