The combination of improved economic structures and sound fiscal policies indeed has the potential to make our monetary policy more effective by encouraging economic actors to take advantage of improved financing conditions and increase investment. Price stability and financial stability Let me now turn, as suggested by the ECON coordinators, to the interaction between price stability and financial stability.
Price stability is, as you know, the primary objective of the ECB and the Eurosystem. And achieving price stability is a necessary condition for financial stability. Clearly, unstable inflation developments can distort a wide variety of macroeconomic and financial fluctuations, to the extent that these distortions become harmful for the economy.