oil and commodity prices which have also been buffeting the economy ) and taking into account the underlying structure of the euro area economy. one question that could arise here is whether the massive injections of liquidity into the banking system come at the price of either an inappropriate monetary policy stance or a less than optimal signalling of it. in practice, this is very unlikely to be the case. indeed, since the beginning of the financial turmoil in august 2007, the ecb has repeatedly emphasised that the policy stance is defined in terms of the interest rate at which financial intermediaries can obtain liquidity, rather than by fixing the quantity of liquidity which is provided. as early as 1970, william poole's classical analysis of the instrument - choice problem taught us that using the interest rate as policy instrument is desirable when short - term uncertainty stemming from instability in the money multiplier or from money demand shocks is high relative to the uncertainty stemming from aggregate demand shocks. the provision of liquidity then becomes an endogenous variable as it is steered in order to stabilise the money market rate at its desired level. in this framework, the sometimes substantial liquidity injections by the eurosystem should be seen as simply offsetting the sudden and sharp declines in the money multiplier induced by the financial crisis. as far as our monetary policy decisions are concerned, they depend on our medium - term assessment of the risks to price stability and are based on our two - pillar strategy, which enables us to cross - check developments in the money, credit and financial markets with the signals provided by economic analysis. given existing upward inflationary pressures from oil and other commodity prices and the associated likelihood of second - round effects, euro area monetary policy was until recently faced with predominantly upward risks to price stability. however, as the financial crisis intensified further, financial conditions for the private nonfinancial sector have tightened – independently of monetary policy – and the supply of credit from financial institutions might be reduced. as a result, expectations regarding economic activity have rapidly deteriorated over the last two months and the upward inflationary pressures have eased, partly as a result of lower commodity prices but also because of the change in the outlook for domestic economic activity. therefore, the coordinated interest rate cut of 50bp last week was also the appropriate response for the euro area to the materialisation of previously identified downside risks to growth and the associated decline in the upward risks to price stability. for the near future, we will continue

benoit cœure : interview with reuters interview with mr benoit cœure, member of the executive board of the european central bank, and reuters, conducted by mr balasz koranyi and mr francesco canepa on 17 may 2017 and published on 18 may 2017. * * * the data has improved since the last governing council meeting. how is this affecting the policy discussion? when you look back at soft and hard data that we ’ ve had over the last weeks and months, it gives a much, much better picture than the one we had, say, one year ago. it ’ s a job - rich recovery and it ’ s much broader both across sectors and across economies. that ’ s all positive. the strength and robustness of the growth rate today in the euro zone shows that our measures have been working. it ’ s fair to say we now see our monetary policy measures fully unfolding. we said it would take time for policy to fully pass through to each and every part of the euro zone economy, in particular across countries. we ’ re seeing this now. what does that imply for future policy? it all depends on how confident we ’ ll be that price pressures will be building up to a point where inflation will be sustainably converging towards two percent, which is our definition of price stability. the growth picture makes us more confident that this will happen. but we cannot be sure at which pace and it ’ s fair to say that today, given the information that we have, we cannot yet be sure that the upturn in inflation is sustainable and self - sustained, that it will be there without our monetary policy support. this comes when you look at different measures of price pressures. one important measure is wages, which we still see as weak in spite of the material decrease in unemployment across the euro zone. you said that the situation improved a lot over the past year yet the guidance is exactly the same as it was back then. which parts of the guidance could change to reflect the improved economic situation? there are different components in our guidance. part of the guidance i would call it structural, so it ’ s not meant to be changed. it describes our reaction function, so the way that our monetary policy reacts to data. just to give you an example, that includes that our monetary policy support is conditional on inflation being on a sustainable path towards 2 percent. that is structural and we ’ re not going to change. when it comes to the choice of