But it is equally true that sufficient existing national policy tools were available to have enabled the regime to survive its first 16 years without the trauma that has been experienced. All that was needed was disciplined national economic policy, supplemented where necessary by sufficient common surveillance of participating countries’ policies.
Moving opportunistically to a higher inflation target would risk unmooring inflation expectations, destroying the hardwon gains that have come from the entrenchment of price stability, and increasing real rates that would exacerbate unfavourable debt dynamics. Financial repression would have to be both massive and sustained. It would undermine the system that has helped bring us the prosperity of the past three decades.