With continued wage moderation, fiscal consolidation and the implementation of long overdue structural reforms to labour and product markets, an extended period of sustainable economic growth is possible - provided that the single monetary policy remains resolutely committed to the maintenance of price stability, taking the necessary prompt action to address inflationary pressures as they emerge. The ECB is strongly committed to this task. The successful introduction of the euro did not occur by accident. Rather it was the result of a long and painstaking preparatory process. This process started in Basel, under the aegis of the Committee of Central Bank Governors. The Committee of Governors was central to the preparation of the Statute of the ESCB and the Maastricht Treaty and, after the signing of the Treaty, undertook the initial groundwork for the move to Monetary Union. After its creation in 1994, the European Monetary Institute, as the institutional precursor to the ECB foreseen in the Treaty, took over the preparatory work. These preparations drew on the accumulated experience of central banks throughout the world, but - of course - especially those in the euro area. In this sense, the long history of the Banque de France that we are celebrating today - as well as the experience of other central banks - has directly contributed to the success of the ECB during its short initial existence. In my remarks this morning, I will discuss some of the lessons drawn by the ECB from the rich history of central banking.
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.