The ECB is financially independent and has a clear mandate, laid down in the Maastricht Treaty. Its primary objective is to maintain price stability and, without prejudice to this objective, it should support the general economic policies in the Community, with objectives such as economic growth and high employment. Independence from politics should not and does not mean isolation from politics.
Given the role that government bonds play in advanced economies’ financial markets, such instability may impair the transmission of monetary policy. This may justify targeted action by a central bank to push markets towards a more stable equilibrium. In general, the lack of fiscal dominance and the exposure to sovereign risk should promote overall better fiscal policies.