In 2003 the Governing Council further clarified that, in conducting its monetary policy, it would aim at stabilising inflation over the medium term at a level below, but close to, 2%. As changes in inflation cannot be controlled over the short term, price stability is sought to be maintained over a medium-term horizon.
The definition reflects the fact that price stability does not mean zero inflation. The theory and practice of monetary policy has consistently found that a low but positive rate of inflation is critical to the functioning of the real economy.