inflation rate of just under 2 % than with one of 0. 5 %? there are several reasons for this. first, we have learnt from japan ’ s experience in 1990s that it is much more difficult to operate monetary policy when inflation goes close to zero. moreover, due to measuring errors, during periods of very low inflation you may think that inflation is still in positive territory, whereas in fact it might be below zero. finally, for countries that want to adjust their external imbalances it is much more difficult to become competitive again if you have very low inflation compared to near to 2 % inflation. if there is no inflation, they have to lower the levels of their nominal wages and prices. that is why most central banks target inflation of just under 2 %. bis central bankers ’ speeches but disinflation is unavoidable particularly for countries that want to become competitive again. indeed. disinflation currently has two causes. it is in part necessary because some countries need to regain their price competitiveness. another aspect of disinflation, however, can be attributed to the very different and fragmented financing conditions in the euro area. are you more concerned about deflation than inflation? actually, i would say neither. the risks of deflation or inflation are limited at this point in time. but wouldn ’ t inflationary pressures rapidly increase in the case of a strong economic recovery? not necessarily. in the us, for example, and certainly in the euro area the recovery after the crisis has not been accompanied by inflationary pressures ; unemployment is too high for that and production capacities are underutilised. the financial markets have clearly calmed down since your famous speech in london in summer 2012, in which you promised to do whatever it takes to preserve the euro. would you say that your words back then have prevented the euro area from breaking apart? the stress in the markets since then has indeed decreased dramatically. my words certainly had a calming effect. but the effect has lasted so long only because, shortly before that, the european governments had agreed on banking union. the trust this indicated in the monetary union has helped the effect last until today. but you received a lot of criticism shortly afterwards, particularly in germany, when you announced the omt programme, under which the ecb can theoretically purchase unlimited euro area government bonds under certain conditions. it was said that, in doing so, you would be carrying out monetary financing, which is prohibited. omts were not designed to

finance government budget deficits, but, in support of our mandate of maintaining price stability, to remove the risk of a break - up of the euro area. we took a lot of precautions when designing omt that demonstrate that the programme has nothing to do with monetary financing. for example, we would only buy on the secondary market ; only buy bonds with short maturities and not necessarily keep the bonds until maturity. but the most important thing is that omts are bound by strict conditionality. this conditionality makes sure that countries put their own houses in order as far as budget financing is concerned. a country that is supported by omt would have to have a reform programme, agreed by the eurogroup. if a country no longer stuck to the requirements of the programme, omt purchases would automatically be stopped. how come you were unable to convince the german public of this? even germany ’ s federal constitutional court is dealing with omts. one of the fears in germany was that this would in the end cause inflation. but this has not been the case up until now, and i get the impression that, as a result, we have been able to allay the concerns of german people somewhat regarding omts. indeed, the risks for germany have decreased since the announcement of the programme. bis central bankers ’ speeches yet people had the impression that, on many decisions taken by the ecb ’ s governing council during the crisis, a small number of northern european countries which are possibly more stability - oriented were outvoted by the rest. do you not find it problematic if a minority are always outvoted? it was not like that at all. the three - year financing operations for banks, ltros, were approved by the overwhelming majority of the governing council, including most of the members you are hinting at ; omts were approved by all members of the governing council except one ; the various interest rate cuts during the crisis were mostly unanimously supported, or with an overwhelming majority. for the last interest rate cut in november, the difference was not so much about whether to do it, but when. up until now, there has not been the same minority constantly opposing the rest of the governing council and, in my view, there will not be in the future. you stress again and again that the ecb has many other instruments at its disposal. but it has already done so much – what else could the ecb do as things stand? we do indeed have many other instruments at