Monetary Policy has been depoliticised and denationalised. The ECB’s mandate The mandate of the ECB is laid down in Article 105 of the Treaty, which clearly states that the primary objective of the ECB shall be to maintain price stability in the euro area.
This specification reflects the fundamental insight that price stability is conducive to sustainable economic growth, job creation, prosperity and social stability. This insight has been established by historical evidence in Europe, it has been widely accepted in policy circles and confirmed by a large number of academic studies. Why is price stability crucial?