The business of a modern central bank is the business of money. Central banks are given the right to issue money by their governments. That is why the Reserve Bank is accountable to Parliament and why its surplus profits are paid over to the Treasury.
Minister Lindner in his speech on the Tax Relief Act, or Steuerentlastungsgesetz, said that one of the coalition’s intended objectives was to dampen peoples’ perceptions of inflation, or “perceived inflation”, as this was one way to prevent dangerous wage-price spirals. I can assure you that the ECB Governing Council is taking warning signs of possible secondround effects very seriously.