The ECB’s mandate is framed in terms of price stability, as this is the best contribution that we can make to the welfare of citizens. Ensuring price stability is a precondition for the economy to be able to grow along a balanced path that can be sustained in the long run. This is the guiding principle of all our monetary policy decisions.
This second pillar of the European monetary framework has also come under stress. Governments that hesitated to consolidate their budgets in times of plenty have recently faced the headwind of a weak economy. However, a regulation should not be classified as being inadequate just because it is causing the regulated parties to feel some discomfort.