such had ireland and italy on one side, with uk, denmark and france, for example, on the other. and there were many other issues which generated quite different combinations of natural alliances. i expect that scholars have explored in detail the way in which the potential for log - rolling could be and was exploited in those days as the many disparate issues offered the potential for wider consensus building and deal - making. the ease with which a cordial and collegial atmosphere could be maintained may have been greater then, even though we know of many spectacular rows. ( some of these rows of course related to the famous exceptionalism of the uk ’ s relationship with europe ; but that too may have helped cement relations among the others ). the larger the number of member countries and the more the big structural issues have been settled in an ever more comprehensive acquis communautaire, arguably the shallower the and fewer the remaining big structural issues that come up for debate leaving more and more of the divergences of interest coming down to straightforward issues of what, in garret ’ s earlier days, was called £sd. the increasing coincidence in recent years, of the dividing line between the advocates and critics of the major policy issues and the broad and persistent fosse between habitual borrowers and structural lenders, has coloured decision - making in the european union to a large extent. this has created a different environment for decisionmaking than existed in the 1970s. weighted voting is of course one of the important mechanisms for facilitating decisionmaking in such a large group and garret was an early enthusiast for finding ways of avoiding veto situations and employing majority and qualified majority decision rules, which are much more widely applicable today. 1 [ 1 ] the veto has not vanished, though. nowadays, then, the onset of the financial crisis and the protracted economic slow - down seems to have widened the long - lasting and recurrent divide between creditor and debtor countries. the identity of which are creditors and which debtors has not changed much of the the ecb governing council still works mostly on a simple one - member one vote system. bis central bankers ’ speeches decades, but the dominance of these grand financial and cross - country redistributional issues has surely increased in our time. arguing for ireland and europe thanks not only to garret of course but to numerous persistent politicians and dedicated public servants, ireland did relatively well in the various negotiations of the early years. and of course it started with

mandate? there is clearly an interdependent relationship between them. a strong economy with low inflation provides a key stabilizing force for beneficial credit intermediation and robust financial market functioning. at the same time, stable and well - functioning financial markets are essential for achieving maximum employment and price stability. the global experience since 2008 reinforces this critical interplay between monetary and financial conditions. however, beyond these basic principles, what is the appropriate monetary policy stance for achieving both financial stability and the dual mandate of maximum employment and price stability? with inflation running well below our 2 percent longer - run target and the unemployment rate still well above its normal long - term level, appropriate monetary policy dictates that low real interest rates should prevail until the economy is further along a sustainable path to its potential level and inflation is closer to target. nonetheless, it is common to hear the because of some differences in product coverage and statistical methodologies, total cpi inflation tends to average 1 / 4 to 1 / 2 percentage points higher than total pce inflation. hence, the fomc ’ s 2 percent target on total pce inflation would translate to a 2. 3 percent to 2. 5 percent target for total cpi inflation. i recently discussed the costs of too - low inflation and the implications of having a 2 percent inflation target in a january 15 speech ; see evans ( 2014 ). bis central bankers ’ speeches argument that these highly accommodative monetary policies might sow the seeds of financial instability. the fear is that excessive and persistently low interest rates would lead to excessive risktaking by some investors. for instance, some firms, such as life insurance companies and pension funds, are under pressure to meet a stream of fixed liabilities incurred when interest rates were higher. 3 ( and perhaps these liabilities were offered at somewhat generous terms to begin with. ) to meet commitments like these in the current low interest rate environment, some firms have an incentive to reach for yield by investing in excessively risky assets. furthermore, with the costs of borrowing at historically low levels, other investors might simply decide that this is a good time to cheaply amplify the risk and return in their portfolios by taking on more leverage. one could reach the conclusion that historically low and stable interest rates pose a threat to financial stability. this creates a seeming paradox for policymakers. on the one hand, the existing large shortfalls in aggregate demand call for highly accommodative monetary policies and