nor hindered. on the one hand, an international currency has advantages for citizens in the euro area, on the other, it may sometimes complicate the conduct of monetary policy when a large amount of euro is circulating outside the euro area. we shall leave the development of the international role of the euro to market participants and market forces. if history is a guide as to what will happen, there will be a gradual process whereby the euro will have an increasingly international role. such a gradual development would also be a welcome development, if only to prevent the euro from becoming too strong externally at some point in time. it is likely and understandable that interest in the euro is already considerable in those countries aspiring to join the eu, including poland. i shall elaborate on this issue at the end of my speech. coming back to our monetary policy strategy, i should like to point out that it is important to make clear what monetary policy can and cannot do. monetary policy can maintain price stability, but only in the medium term. in the short term prices are also influenced by non - monetary developments. moreover, monetary policy measures only have an impact on prices with long, variable and not entirely predictable time - lags of between 1. 5 and 2 years. therefore, monetary policy - making should have a forward - looking character. today ’ s inflation is the result of past policy measures, and current policy measures only affect future inflation. the uncertainty of the economic process in a market economy is another reason for policy - makers to be modest. the ecb does not pursue an activist policy. precise steering of the business cycle or a cyclically - oriented monetary policy are not feasible and are likely to destabilise rather than stabilise the economy. some commentators have interpreted our recent interest rate reduction as a change to a more cyclically - oriented monetary policy strategy. this is not true. our strategy was, is and shall remain medium term - oriented and firmly focused on maintaining the price stability which currently prevails in the euro area. monetary policy should be supported by sound budgetary policies and wage developments in line with productivity growth and taking into account the objective of price stability. otherwise, price stability can only be maintained at a high cost in terms of lost output and employment. this also explains why independence should not mean isolation. it is important to have a regular exchange of information and views with other policy - makers. the maastricht treaty stipulates that the president of the ecb

italy and the others? before the crisis there were marked differences in wage costs and competitiveness, in greece in particular. these persistent differences have created serious tensions within the euro area. macroeconomic imbalance adjustments are not made via the exchange rate in the monetary union. that ’ s why it ’ s essential that the labour market and the goods and services markets work well. the bank for international settlements is worried about risks caused by monetary policies that are too accommodative. what ’ s your reply to that? our main objective is to ensure price stability. the financial crisis has created deflationary risks. our monetary policy measures have played a key role in the economic recovery, which is necessary for inflation to gradually return to levels in line with our objective. the question is knowing whether the central bank has gone too far in its monetary policy easing. now that the gap between growth potential and real activity is narrowing, have we accomplished our mission? at this stage, my reply is no. the economic expansion that is under way is not yet feeding through into higher inflation. we are not changing our priorities, but we must take into account the improvement in economic conditions when calibrating our measures. should an end date for qe be announced? no new decision has been taken since the governing council meeting on 7 september. we had concluded that a very accommodative monetary policy stance would remain essential to our mission and that we would decide in the autumn on the calibration of our purchase programme for the period beyond the end of the year. 2 / 2 bis central bankers'speeches