This “geography is destiny” theory which ruled for much of our recorded history is now seriously challenged by the latest sweep of IT-enabled globalization. Received wisdom today is that geography is irrelevant. No longer is a country’s destiny tied down to its geographical location or its physical resources.
And that the rules are respected and the responsibilities are taken seriously. I would like to use this occasion to explain the way the Governing Council of the ECB is deciding on monetary policy. Our standard measure for fulfilling our mandate of maintaining price stability – avoiding both inflation and deflation – is interest rate policy.