It is recognised that there are a few structural and tax issues that render Government Securities somewhat unfavourable as compared with other financial instruments available to savers. First, the rates of interest paid on small savings and tax exemptions available to such instruments cause a dampening impact on retailing of Government Securities, and also increase the cost to Government.
Last summer, the European Central Bank’s Governing Council adopted a new monetary policy strategy for the ECB: we have a symmetric inflation target of 2% over the medium term. Currently, the medium-term outlook for inflation in the euro area is not far from this target.