PART 1: The main features of the Eurosystem monetary policy strategy Let us see what are the main features of the single monetary policy, conducted by the Eurosystem, in terms of institutional and operational framework as well as on strategic issues themselves. 1. The institutional and operational framework is founded on modern concepts Let me recall first that over the past decade, a large body of literature has been devoted to questions surrounding central bank independence, the concepts of transparency and monetary strategies, and the communication of monetary policy decisions. Drawing on this analytical expertise and the experience of the national central banks of the participating countries, the Eurosystem is first and foremost based on a modern institutional framework, founded on the principles of independence, transparency and accountability and, lastly, operational decentralisation. 1.1. The independence of the Eurosystem fosters price stability The Eurosystem’s primary objective, as enshrined in the Maastricht Treaty, is to achieve and maintain price stability. As many empirical studies have shown, a country’s ability to fight inflation appears very closely correlated to the degree of independence of its central bank. The independence of the European Central Bank and the 12 national central banks of the Member States of the euro area is therefore anchored in the Treaty. In operational terms, this means that, in the conduct of their duties, neither the European Central Bank nor the national central banks of the Eurosystem may request or take instructions from the Community institutions, national governments or any other body.
Benjamin Franklin is the very example of what was known at the time as an “honest man”. Benjamin Franklin showed a marked interest in Europe from a very early age. He started learning French, Italian and Spanish (in addition to Latin) in 1733. He journeyed abroad and lived both in France and England. I would like to stress his interest in France by pointing out that he was elected Associé Etranger of the French Academy in 1772 and became Plenipotentiary Minister in Paris in 1779. When referring to Benjamin Franklin, one often has in mind the great inventor, the philosopher, the essayist or the polemicist but one often forgets to mention that he also published a number of economic essays and studies. It is worth mentioning the book “Way to Wealth”, which some people consider as “the first American book on personal finance” or as “the best and the wisest money book ever written… ”. As you can probably imagine, Benjamin Franklin’s philosophy has crossed the Atlantic and still guides decision-makers today, including at the European Central Bank. In that regard, I would like to touch on a few ideas drawn from his autobiography. I need not remind you of his great fondness for quotations, especially in Poor Richard’s Almanack. In his autobiography, Benjamin Franklin defined a number of virtues that he believed to be cardinal. They included temperance, silence, order, resolution, frugality, industry, sincerity, justice, etc. I find his interpretation of these terms interesting.