It is laid down in the Maastricht Treaty and has proven elementary during the crisis. Central bank independence is also fully borne out by the strict prohibition of monetary financing. 3. Medium-term orientation  The medium term orientation is based on the well-established fact that long and variable lags characterise the transmission of monetary policy decisions.
Monetary policy cannot be used to dampen short-term effects on price developments, and it should avoid fine tuning of demand conditions. 4. Transparency and accountability  Transparency and accountability strengthen the credibility of the central bank’s commitment to price stability, by ensuring that the public understands that the motivation behind monetary policy decisions is the pursuit of price stability.