We at the Bundesbank believe that our proven monetary targeting strategy is appropriate in principle for the euro area, too. At all events, studies suggest that the demand for money in the euro area is actually likely to be even more stable than that in national markets.
Above all, a monetary targeting strategy has the advantage that it involves an inherent commitment on the part of the central bank, and sets a standard by which the central bank must let itself be judged. Hence a monetary targeting strategy may be a major element in building up the European Central Bank’s reputation.