aspects will be considered separately. some of us attach more importance than others to monetary indicators. what is so attractive about our strategy is that it leaves room to afford greater or lesser weight to the different indicators. in an economy as complex as that of the euro area, this is a sensible approach. strategy in practice in practice, making monetary policy is difficult because the economy is continuously exposed to shocks, the effects of which are sometimes not entirely predictable. one might think of sudden changes in the oil price caused by tensions in the middle east ; of failing crops ; or of exchange rate fluctuations. in particular, shocks that push up inflation in the short - term while at the same time reducing output, confront a central bank with difficult policy decisions. a strategy offers a guideline for choosing among the available options. in this context, some ecb watchers have urged the eurosystem to direct its policy towards what they call " underlying inflation " instead of unadjusted inflation. in their view, underlying inflation is something of a cure - all. by assigning a central role to this concept of inflation, the eurosystem would, as it were, be able to see through the direct impact of a shock on prices. the usual method to arrive at underlying inflation is by disregarding fluctuations of volatile components such as energy and food prices in calculating inflation. i myself reject a monetary policy explicitly centred on underlying inflation. like other cure - alls, it is a piece of quackery. rely on it too much, and it can become life - threatening. there is a real danger that a policy centred on an artefact such as underlying inflation would harm the ultimate goal, which is price stability. the public is not interested in underlying inflation, but in the inflation they can see in their purses. for this reason, the european treaty is also directed towards maintaining price stability, not towards underlying inflation. another major objection would be that the categorical exclusion of, say, oil price rises from relevant inflation rate is based on flawed reasoning. without doubt, oil price rises are often to some extent exogenous. think of a decision by opec to raise prices or of rising tensions in the middle east. to the extent that such a shock is exogenous, there is little reason to worry about more than the knock - on effect on, in particular, wages. but in many cases a rise in oil prices may also reflect increased economic activity. an oil price increase due to a

problem has begun to disappear, simply because the public has become more accustomed to our approach. a great help in this respect was the decision to halve the frequency of meetings where monetary policy is discussed to once every month. this has also reduced the extent of speculation over impending interest rate adjustments. in the second place there was – apart from the occasional communication error – too much communication sometimes, especially in the early days. this may sound paradoxical, but what counts is optimum, not maximum, communication. too many messages do not enhance transparency, especially if they convey what seem to be contradictions. for this reason, the governing council has agreed that in the run - up to each monthly meeting, radio silence will be observed about developments with a direct bearing on monetary policy. thirdly, communication is a complicated matter if one wishes to be as open as the ecb. although it does not publish minutes of its meetings, the ecb is the only large central bank which holds a press conference directly after every decision, to explain its motives. at the same time, a communique is published enumerating the considerations which have led to the decision. compare this to the sober comments by the bank when it pursued its independent monetary policy, pegging the guilder to the deutsche mark. we used to confine ourselves to phrases like : " domestic and foreign developments considered, the nederlandsche bank has decided to lower the interest rate on advances by 0. 25 % to 5. 25 %. " the question pondered these days is how the eurosystem ’ s press releases may provide even more clarity on the considerations leading to interest rate decisions. this has been an ongoing issue. having said this, it would not be very useful to publish individual members ’ views on interest rate policy. a single person may simultaneously harbour considerations in favour of and against a specific decision. besides, in the european context there would be the risk that views of individual council members could be linked erroneously to the economic situation in their home country. what ultimately matters is the credibility of the eurosystem as a whole and publishing the opinions of individual council members would add little, if anything, to that. to sum up, the monetary strategy of the eurosystem offers a sound framework for economic and monetary analysis ; it has been effective, in my experience, in guiding the monetary decision - making process within the governing council of the ecb. the results are favourable, considering current and expected inflation. there have been occasional