very important result, perhaps the most important, for a central bank whose mandate is to maintain price stability over the medium term. hence, the essence of the existing definition of price stability, namely, a year - onyear increase in the harmonized index of consumer prices for the euro area of below 2 %, was fully confirmed. at the same time, the governing council clarified that in the pursuit of price stability it will aim to maintain inflation rates below, but close to 2 % over the medium term. this clarification emphasizes the need for a sufficient safety margin against the risk of deflation. there are several good reasons for accepting a low rate of inflation. the major concern is the fact that monetary policy may become less effective, if interest rate management by the central bank is constrained by a liquidity trap or a “ zero bound ” problem. ecb analyses show that such constraint should not pose a significant threat if inflation remains sufficiently above zero. the clarification we provided to the price stability definition offers a safeguard in this sense. in preventing the emergence of deflationary and inflationary dynamics alike, a forward - looking orientation of monetary policy is essential. there is no convincing evidence that relying on rigid rules helps in this respect. rather, the medium term orientation of the ecb strategy, with its explicit reference to all relevant indicators of future price developments, provides flexibility and forwardlooking orientation while maintaining a firm reference to the medium term price stability goal. the role of money and the two - pillar framework the governing council confirmed that the two - pillar framework of the strategy is an effective tool to organize the information on different risks to price stability. different types of analysis provide information relevant for price developments at different time horizons. the economic analysis focusing on the most proximate causes of inflation such as cost developments and demand - supply imbalances - primarily contributes to assess short to medium - term economic developments and consequently risks to price stability at that horizon. the monetary analysis - focusing instead on the ultimate monetary determinants of inflation - primarily contains information for assessing price developments at medium to long - term horizons. the economic literature suggests that there is no easy way to bring together the monetary analysis with the economic analysis in a unified framework ; or, as we could say more technically, to integrate money and credit into today ’ s standard macroeconomic models. in this respect, the monetary analysis mainly serves as a means of crosschecking, from a medium to long - term perspective, the short

, and most importantly for us, central bankers, with the digital euro, we would strengthen the monetary sovereignty of the euro area, and preserve the effectiveness of monetary policy. * * * taken all together, the digitization of public money seems to be rather a necessity than merely an opportunity. at this point, readiness is key concept we are following. that is why today, the vast majority of central banks are considering their own digital currency. after the eurosystem has recently completed the investigation phase, we have just embarked on the preparation phase. therefore, we do not have all the answers yet, but we are keeping up to be prepared if or when the time comes for its introduction. to share with you the findings of work done so far, and also to address open issues, i have invited my fellow colleagues, governors from croatia, estonia, lithuania, malta and slovakia to share our knowledge and views on the digital euro. but before we move on to the panel discussion, let me give the floor to simon anko, director responsible for the digital euro project at banka slovenije to set the scene : what we have achieved so far and what are the dilemmas we are faced with. 2 / 2 bis - central bankers'speeches