I believe that in the euro area R* can be estimated as below or close to 2% in nominal terms, and we could be there by the end of the year. Until then, we definitely have to act, in a determined but orderly way. Doing so is normalisation, only beyond R* would tightening begin if needed. The US is obviously closer to tightening: due to several differences in the nature of inflation across the Atlantic, the monetary answer must have its differences too. But in both cases, it’s not only a legal duty, it’s also an ethical commitment: ensuring price stability is our responsibility; our will and our capacity to deliver on our mandate cannot be subject to any doubt whatsoever. 3. Accountability Turning to the third corner of the golden triangle of trust, accountability, you remember that famous sentence by Alan Greenspan: “I know you think you  Page 6 sur 10 understand what you thought I said but I'm not sure you realize that what you heard is not what I meant”. This provocative sentence certainly captured the difficulty for central banks to account for their monetary policy, but let's be clear, it belongs – or must belong - to a bygone era. No matter how complex, it is central banks’ duty to account for their monetary policy decisions in a comprehensible manner; accountability is the natural counterpart for independence. This necessary change has both a cyclical and a structural component.
On the other hand, in line with my comments above, this objective could be made more symmetric, by clarifying that the degree of tolerance of above-target inflation deviations is the same as for below-target deviations.13 Also, in the current low inflation environment, with interest rates close to their lower bound, the inflation target should take into account the need for a sufficiently large buffer above zero, to provide more scope for conventional interest-rate policy. Irrespective of the final outcome, I am sure that the result of this review will strengthen the effectiveness of monetary policy in the euro area and its capacity to achieve its aims in the macroeconomic environment of the coming decade. I should like to conclude with a final reflection on the interaction between monetary and fiscal policy going forward. Experience in recent years suggests that appropriate interaction between these policies may decisively contribute to each of them achieving their objectives more efficiently. As I have attempted to emphasise, the ECB’s monetary policy action in response to the economic consequences of the pandemic has been rapid and decisive. Moreover, we are prepared to add further monetary stimulus, if necessary. Fiscal policy action has also been forceful. It is important that this action be maintained during the recovery, in a more focused way, and, if necessary, even increased.