It is its very flexibility that should make the PEPP our preferred marginal instrument for dealing with the consequences of the crisis, and I would now like to expand on its components. First, flexibility in terms of time. We are not bound by a monthly allocation. And the programme is clearly intended to be temporary: the Governing Council “will conduct net asset purchases under the PEPP until it judges that the coronavirus crisis phase is over, but in any case not until the end of this year [2020]”. There is a risk that the economic consequences of the crisis may continue beyond the end of 2020, possibly justifying an extension to the PEPP; I then believe it would be advisable for us to clarify the criteria, “state-dependent” on the economic situation, upon which we will base our decision to close the programme in the future. Second, flexibility in terms of volume. Unlike the PSPP, we are not committed to a fixed amount – today, the PEPP can go “up to EUR 750 million”, and we stated on 30 April that we were prepared to go further if need be. However, in my opinion this would only make sense if at the same time we ensure the maximum effectiveness of the PEPP. And this brings me to my third point, flexibility in terms of allocation between countries.
– flexible: we cannot guarantee 2.0% either all the time or straight away. – and, consequently, medium-term. This medium-term target needs to be viewed in two ways: it is forward-looking, to guide inflation expectations; but it cannot completely ignore the past either. Should we go as far as targeting an average level of inflation of close to 2%, and therefore explicitly compensate for any undershooting or overshooting of the target over time? This question remains open, and will be part of the “strategic review” of monetary policy that the ECB will pick up again in the next few months. One key question in this case would be the period over which the inflation average would be measured: I think the public health crisis could provide some justification for this sort of “averaging”, at least temporarily, starting as of the beginning of the crisis. In the American debate, this is called TAIT (Temporary Average Inflation Targeting). Independence in implementing the mandate The ECB is independent on two levels. First, its action in implementing the mandate entrusted to it democratically under European legislation is not subject to approval by national governments, nor to national legal interpretation. Second, in its action, the ECB never submits to pressure from the market or from trends in the media. In the current context of an unprecedented rise in public debt, this independence is more important than ever. France’s debt should exceed 115% of GDP by the end of this year.