ecb ’ s policy goals, strategy and actions. in the end, the governing council confirmed the definition adopted in 1998, but supplemented it with an aim of “ below, but close to, 2 % ” for the inflation target. this was expected to provide a safety margin against deflation risks and an inflation buffer for the labour market, as well as enough room to facilitate relative price adjustment in the monetary union. however, setting the inflation target at the upper bound of the price stability definition generated a perception of asymmetry and ambiguity on the target. this will be discussed by dr. juha kilponen in the first session today. in a way similar to other major central banks that have adopted a framework of flexible inflation targeting, the ecb ’ s current monetary policy strategy includes two additional key elements. the first is that price stability is a forward - looking concept that is to be maintained over the medium 1 / 5 bis central bankers'speeches term. the second is that the ecb is mandated “ without prejudice to price stability ” to support the general economic policies of the union. and this is not a mere footnote, since when reading the eu treaties ( article 127 of the tfeu and 3 of the teu ), “ without prejudice to the objective of price stability ”, we as the eurosystem are pledged to “ work for the sustainable development of europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress ”. hence, i find the sometimes passionate debate that every now and then pops up on the need for a ‘ dual mandate ’ rather pointless, almost like shadowboxing. it is already in the treaty, unless we call it a ‘ triple ’ or ‘ quattro ’ mandate, since if we respect our legal mandate we need to aim at achieving full employment, balanced growth and sustainable development – indeed as long as price stability is not compromised. ecb strategy review so much for the historical and legal background. in january this year, the ecb launched a new strategy review of its monetary policy framework, but unfortunately this had to be postponed for half a year due to the covid - 19 outbreak. the review was re - launched in september this year and is expected to be completed by september next year. the review is ongoing, and we are currently in the middle of the debate. it is not yet the time to draw definitive conclusions, and i maintain an open mind and want

the gst was to bring about a fall in house - building in the second half of 2000 that was much bigger than anyone had forecast or we had ever previously experienced ( graph 1 ). while house - building only comprises 5 per cent of gdp, its fall of 37 per cent in two quarters was enough to outweigh reasonably healthy growth in the other 95 per cent of the economy, and so produce a contraction in gdp for the half - year. there were other factors at work as well, for example, the rising oil price, and there were other parts of the economy that were affected, for example, the labour market. but the figures clearly show that the fall in house - building subtracted 2. 2 percentage points from the half - year ’ s gdp growth, and hence accounted for the overall contraction in economic activity ( graph 2 ). this was a transition effect of the gst, which would soon reverse, and therefore should, in principle, have no effect on our average prospects over the medium term. the problem with transition effects, however, is that they can affect people ’ s confidence and their expectations because at the time no - one can be sure they are transitory. this happened on this occasion as business confidence fell, although not precipitously, over the second half of 2000. when the decline in gdp was revealed in early march, confidence took a sharper turn for the worse. not only did business confidence fall further, but consumer confidence and the exchange rate joined in, and the share market did not escape without damage. this was a period of considerable gloom, when some observers went so far as to suggest that australia might talk itself into recession. in terms of the two components of our view, the second seemed to have completely eclipsed the first, and you could be forgiven for believing that there was no longer any substance to the first view. what we now know is that at precisely the time that confidence was reaching its low point – the march quarter of 2001 – the transitional effects were dropping out of the calculations and the economy was returning to reasonable growth. the march quarter national accounts show this clearly, and a range of other indicators show a distinct improvement from their march low point ( graph 3 ). · consumer sentiment, although declining in the second half of 2000, had remained above its long - term average until it fell sharply in march. it has now regained a level above its long - term average. · the share market has been generally very buoya