communication technologies ( ict ). 3. the european central bank let me now turn to the euro and the european central bank itself, its mandate and its strategy. given the importance of credibility for central banking it is crucial for the success of emu that the treaty establishing the european community – which i will refer to as the " treaty " – provides a sound institutional framework for an effective monetary policy. it is not my intention to review the provisions of the treaty in any detail, but it is worth recalling that the treaty clearly establishes the maintenance of price stability in the euro area - i. e. the internal stability of the euro - as the primary objective for the single monetary policy. this takes into account that the best contribution that the ecb can make to the economic and social wellbeing of the euro area is to focus on maintaining price stability. without prejudice to its primary objective, the single monetary policy shall also support the general economic policies of the european community. however, the means and the responsibility for ensuring other objectives, such as a high level of employment and output growth, lie primarily at the national level and, to some extent, at the level of eu institutions. the allocation of tasks and objectives to different policy - makers in the euro area is thus very clear, which in turn ensures efficiency, transparency and accountability in economic governance. furthermore, the treaty ensures the independence of the ecb. in this way, potential political pressures must be resisted and european citizens can be assured that the ecb will take a long - term, euro area - wide perspective in pursuing its mandate of maintaining price stability. the design of the monetary policy strategy of the ecb was guided by the recognition that monetary policy will always have to cope with a changing and imperfectly known world. in addition, it had to be borne in mind that the creation of emu and the establishment of the ecb marked a historical discontinuity, with potentially profound implications for economic behaviour and measured structural relationships. in these circumstances, the governing council of the ecb chose to announce a quantitative definition of price stability and to equip itself with an internally consistent and at the same time comprehensive and suitably flexible approach to policy analysis. the definition of price stability as " a year - on - year increase in the harmonised index of consumer prices of below 2 % ", along with the emphasis on the medium term, is designed to enhance clarity, to anchor expectations and to provide a yardstick against which the new independent institution

, after 1. 8 % in july. annual growth in m3 continues to be supported by its most liquid components, with the narrow monetary aggregate m1 growing at an annual rate of 5. 8 % in august. the annual rate of change of loans to non - financial corporations ( adjusted for loan sales and securitisation ) remained negative at – 2. 0 % in august, after – 2. 2 % in the previous month. on average over recent months, net redemptions have moderated from the historically high levels recorded a year ago. lending to non - financial corporations continues to reflect the lagged relationship with the business cycle, credit risk, credit supply factors and the ongoing adjustment of financial and non - financial sector balance sheets. the annual growth rate of loans to households ( adjusted for loan sales and securitisation ) was 0. 5 % in august, broadly unchanged since the beginning of 2013. against the background of weak credit growth, the ecb is now close to finalising the comprehensive assessment of banks ’ balance sheets, which is of key importance to overcome credit supply constraints. to sum up, a cross - check of the outcome of the economic analysis with the signals coming from the monetary analysis confirms the recent decisions taken by the governing council to provide further monetary policy accommodation and to support lending to the real economy. monetary policy is focused on maintaining price stability over the medium term and its accommodative stance contributes to supporting economic activity. however, in order to strengthen investment activity, job creation and potential growth, other policy areas need to contribute decisively. in particular, the legislation and implementation of structural reforms clearly need to gain momentum in several countries. this applies to product and labour markets as well as to actions to improve the business environment for firms. as regards fiscal policies, euro area countries should not unravel the progress already made and should proceed in line with the rules of the stability and growth pact. this should be reflected in the draft budgetary plans for 2015 that governments will now deliver, in which they will address the relevant country - specific recommendations. the pact should remain the anchor for confidence in sustainable public finances, and the existing flexibility within the rules should allow governments to address the budgetary costs of major structural reforms, to support demand and to achieve a more growth - friendly composition of fiscal policies. a full and consistent implementation of the euro area ’ s existing fiscal and macroeconomic surveillance bis central bankers ’ speeches framework is key to bringing down high public debt ratios,