The two-pillar strategy chosen by the Eurosystem where these pillars represent distinct, yet complementary, approaches - captures this complexity in an honest and genuinely transparent manner. This naturally brings me to transparency - a topic of considerable and ongoing debate in the euro area. In my view, the transparency of the monetary policy process is best understood as the extent to which the external, presentational role of the strategy is consistent with the internal, decision-making procedure. As a party to both the decision-making and the presentation of the single monetary policy, I can assure you that the correspondence between the internal and external aspects of the Eurosystem’s strategy is extremely close. Discussions in the Governing Council take into account, on the one hand, an analysis of monetary developments and their implications for monetary policy and, on the other, an assessment of other financial and economic indicators, including macroeconomic projections based on conventional forecasting models and expert judgement. Comparisons are drawn and links are made between these two forms of analysis. Decisions are based on the information revealed through this exercise. The two-pillar framework that is used to explain policy decisions to the public therefore mimics rather precisely the internal decision procedure. Honesty is thus at the heart of the Eurosystem’s approach to communication. An inevitable consequence of our honesty in the face of a complex, uncertain and changing environment is that the ECB’s strategy cannot be simple, in the sense that it cannot be described using a single indicator or forecast.
Ardo Hansson: European and domestic economic challenges for Estonia in 2014 Speech by Mr Ardo Hansson, Governor of the Bank of Estonia (Eesti Pank), to the Riigikogu (the unicameral Parliament of Estonia), at the presentation of Bank of Estonia’s Annual Report 2014, Tallinn, 26 May 2015. *  *  *  Honourable President of the Riigikogu, Distinguished Members of the Riigikogu I am here today to give you a summary of the year 2014 at Eesti Pank. I will speak on the economy in the euro area and on monetary policy, and I will discuss the Estonian economy and the work of the central bank last year. The euro-area economy, monetary policy and fiscal policy In 2014 the economy of the euro area as a whole grew, but the situation varied a lot between different countries and overall growth was slower than had been forecast. Data from the start of this year suggest that economic activity in the euro area is staging a modest recovery. The competitiveness of the euro area has improved during the recovery from the crisis, but again the situation varies between countries. There are countries that have successfully introduced reforms, but there are also those where reforms have stopped or even gone into reverse. •  Here I must emphasise that long-term economic growth can only be built on reforms that raise economic competitiveness.