higher inflation, which become increasingly more costly as the level of the inflation target rises. this new objective provides a clear target, replacing what had become an ambiguous and unclear objective ( which defined price stability as an annual increase in prices of below 2 percent and specified an inflation aim of “ below, but close to, 2 per cent ” ). we have also made clear that the 2 per cent target is symmetric : it is equally undesirable to have inflation that is too high above or too far below 2 per cent ( recognising that economies are changing constantly and that inflation will not be 2 per cent precisely all of the time ). the main reason for these changes is that, compared to when the last strategy was agreed in 2003, disinflationary pressures have become more acute. the need for a clearer target had become self - evident and a perception that the “ close to but below ” objective was asymmetric may have contributed to the decline in inflation expectations and the persistence of low inflation over the last decade. in such a disinflationary environment, we want to make clear that we will take forceful action to respond to inflation below our target ( as well as, of course, inflation that was above the target ). we will tolerate small deviations in either direction over short, transitory, periods to ensure the smooth functioning of the economy. ( unlike the us federal reserve, we decided against adopting “ average inflation targeting ”. although we are both central banks, our mandates are different and, overall, we decided that our new target was simple, clear and easy 1 / 2 bis central bankers'speeches to communicate, and more appropriate for the ecb. ) second, we decided that we will take account of the cost of owner - occupied housing when assessing price pressures. this would better reflect people ’ s experience of inflation ( as we heard when we consulted the public last year ). we also laid out a roadmap for how to include these costs in our target measure of inflation. ultimately, this is a decision for the european statistical system but, in the meantime, we will use standalone data on housing costs to inform our monetary policy assessments. third, climate change has been a key issue in our review. while governments have the primary responsibility to act and mitigate the effects of climate change ( after, of course, the actions of individual households and businesses ), central banks can also play an important role. last week we committed to an action plan

ewald nowotny : european integration in a global economic setting – cesee, china and russia opening remarks by prof dr ewald nowotny, governor of the central bank of the republic of austria, at the conference on european economic integration ( ceei ) 2011 : “ european integration in a global economic setting – cesee, china and russia ”, vienna, 21 november 2011. * * * good morning, ladies and gentlemen, it is a great pleasure for me to welcome you to the conference on european economic integration 2011 on “ european integration in a global economic setting – cesee, china and russia ”. a particularly warm welcome goes to governor erkki liikanen from suomen pankki – finlands bank and to all the representatives of the finnish central bank who have joined us here in vienna for the conference. moreover, i am pleased to welcome, for the first time, all our viewers at suomen pankki who are watching a live webcast of the ceei on screen in helsinki. in the history of the ceei, this is a very special year. while there has been international cooperation in organizing the ceei in the past, for example with the ecb or the imf, this is the first ceei we have jointly organized with a eurosystem ncb – the finnish central bank. moreover, this is the first time we have extended the conference topic to include new economic areas – china and russia. of course, there are several very good reasons both for this cooperation and for broadening the conference topic. some of you may know that the oenb focuses its economic analysis and research on central, eastern and southeastern europe ( cesee ), mainly because of austria ’ s strong historical and economic links to the region. similarly, suomen pankki – or more specifically the bofit, the bank of finland institute for transition economies – has a regional research focus, namely on russia and china, thus covering two of the most interesting and promising emerging markets of the world. given this year ’ s conference topic, it was therefore only logical to invite our finnish friends to organize the ceei 2011 with us – and we were very pleased that they accepted our invitation and supported us with their valuable expertise. for two decades, this conference series has been devoted to spreading and deepening the knowledge of european economic integration with a particular emphasis on cesee economies in transition. yet we decided to expand our focus this time. of course, you might