. attempts to support growth and employment by deviating from a monetary policy needed to maintain price stability would prove detrimental over longer horizons, thereby decreasing welfare and undermining the credibility of the single monetary policy. on the contrary, by focusing on its mandate and therefore avoiding both prolonged inflation or prolonged deflation, the ecb creates the stable environment in which appropriate structural and fiscal polices may promote output potential effectively. to support and safeguard the pursuit of price stability, the treaty endowed the ecb with a high degree of institutional independence, and in order to ensure transparency and accountability, it imposed on the ecb extensive reporting requirements. the definition of price stability and the two pillars of the ecb's strategy the complexity of the monetary policy transmission mechanism requires that the preparation, discussion and presentation of policy decisions be placed in a coherent clarifying framework. this is the task of the monetary policy strategy that is designed both to grant the policy - making of the governing council a clear and consistent structure, and to provide the most suitable vehicle for communication with the public. the monetary policy strategy chosen by the governing council ensures a comprehensive assessment of the economic situation, of the size and nature of the shocks hitting the euro area and of the related risks to price stability. the quantitative definition of price stability constitutes the first feature of this strategy. the announcement of a numerical definition has been devised to enhance clarity, anchor expectations and offer a yardstick against which the ecb can be held accountable. the governing council defined price stability as " a year - on - year increase in the harmonised index of consumer prices for the euro area of below 2 % ". the upper bound of 2 % is in line with the practice of participating national central banks before the start of stage three of economic and monetary union ( emu ). it enables the existence of a possible positive measurement bias in the hicp to be taken into account and creates a " safety margin " which helps ensure that negative rates of " true " inflation are avoided. the headline hicp is the indicator chosen as the preferred measure to quantify our primary objective because this is the homogeneous statistic that most closely approximates the " true " basket of private households'consumption in the euro area. while core measures of inflation that exclude the most volatile items are also regularly monitored for the purpose of a comprehensive analysis, the headline hicp is the variable on which we focus as our objective. the governing council also emphasised that price stability has to be maintained over the medium term

jorg asmussen : cees and the crisis – current challenges and benefits speech by mr jorg asmussen, member of the executive board of the european central bank, at the iif central and eastern europe ceo conference, berlin, 29 april 2013. * * * dear tim, dear mr. fitschen, ladies and gentlemen, thank you very much for the invitation to join you here today. my initial remark today may disappoint some of you, in particular the journalists who are present : as the ecb ’ s governing council will meet this week as of wednesday, our “ selfimposed one - week blackout period ” applies and i will not comment on monetary policy today. speaking as a european central banker in front of an audience with first - hand experience of how the crisis in the euro area has challenged central and eastern europe, i expect a lot of questions. “ is euro area membership really a good idea for those countries? ”, some people may be asking, or “ should they not stay out for the time being until the euro area has sorted itself out? ”. the media are full of reports about the countries of the region postponing their envisaged entry date, or dropping that goal altogether. 1 on top of this, as the euro area tackles the crisis and reforms its policies and institutions, the “ in - or - out ” question has become more complex. a country can be outside the monetary union, but still sign up for the fiscal compact, or join the soon - to - be - established single supervisory mechanism ( ssm ). the line between helpful inclusion and potentially damaging exclusion is not so clear any longer. but as this audience knows better than most, how these issues are resolved will have profound implications for businesses in central and eastern europe. the question whether or not to join the euro has major economic consequences. the question whether or not to join ssm, and the wider banking union, could be decisive for financial stability. in light of this, i would like to focus my remarks today on addressing these issues. in particular, i want to answer two questions : first, is joining the euro area good for growth? second, is joining banking union a good idea? 1. is joining the euro area good for growth? starting with my first question, ‘ is joining the euro good for growth ’? on the surface, the seven central and eastern eu member states that have not yet adopted the euro seem to be doing better by being outside