The generous liquidity situation in 1999 will have to be borne in mind. Given the monetary origins of inflation over the longer term, the Governing Council assigns a prominent role to money. To signal the prominent role of money to the public, in October 1998 the Governing Council decided to announce a quantitative reference value for the growth rate of a broad monetary aggregate. The first reference value was derived using the well-known relationship between monetary growth, on the one hand, and developments in prices, real GDP and the income velocity of circulation, on the other. It was therefore based on the Eurosystem's definition of price stability.
Price stability is to be maintained over the medium term.
At its meeting on 2 December 1999 the Governing Council reviewed these assumptions and confirmed that both of them remain valid. The Governing Council therefore saw no reason to change the reference value. The Governing Council also took the opportunity of this review to re-emphasise that the concept of a reference value is embedded in a monetary policy strategy which is aimed at the maintenance of price stability. The strategy uses two pillars in order to assess the risks to future price stability. The reference value for monetary growth is an important part of the first pillar of the strategy, which assigns a prominent role to the analysis of monetary developments.