among persons who are more conservative than ‘ the public opinion ’ so that the managers are only interested in achieving price stability, without laying much emphasis on the short - term effects of monetary policy on the real economy. another idea is the proposition by carl walsh, under which politicians should agree with the central bank management on a long - term agreement on results, which would reward the management for achieving price stability and punish it for inflation or deflation. i cannot tell how literally or even seriously these researchers have intended their propositions to be taken. in practice, efforts to build up central bank credibility have however been slightly different, mainly comprising the following three complementary approaches. the first one of these is ensuring central bank independence. the european central bank, for example, enjoys full functional and financial independence in relation to the european union's political institutions, and the members of the governing council responsible for the ecb's monetary policy are widely protected in the discharge of their duties. nor are we allowed to take monetary policy instructions from any outside instance. the same requirement for independence also applies to the central banks of all member states participating in economic and monetary union ( emu ). with new member states joining economic and monetary union in the next few years, legislation concerning their central banks will also have to fulfil these requirements. another approach is building up a solid reputation. through the conduct of a consistent, successful and well - founded policy, the central bank may, over time, acquire such credibility as is needed in the implementation of monetary policy. the build - up of a solid reputation may be accelerated by a public commitment to the objective of price stability. transparent communication on policy measures, their underlying economic analysis and rationale, and on factors affecting future policy has added to monetary policy credibility. despite its young age, the european system of central banks ( escb ) has been able to gain a high level of confidence, reflected in, for instance, the fact that inflation expectations in the euro area are fairly well in line with the objective of price stability. in this respect, the ecb has benefited from the confidence and credibility that the german central bank, the bundesbank, had acquired in the course of decades. notably in its first years of operation, the ecb focused on maintaining continuity relative to the traditional monetary policy stance of the largest member state, germany. a third approach to securing monetary policy credibility consists of the coordination of other economic policies with the aim of maintaining price stability. this especially concerns fiscal

jobs that are below their qualifications. countries that lose labour, are deprived of an active labour force, and pressures can aggravate differences in salaries. in the receiving countries, in contrast, employees often reject newcomers as competitors that are willing to work for considerably lower pay. long - term advantages may nevertheless greatly benefit all parties. economic growth in the receiving country accelerates and over time, the salary levels of old employees in the competed sectors also increase. an important factor in the present migration movement is also that the emigrants are more likely to return home than earlier. recent evaluations show that nowadays most emigrants will eventually return home, bringing with them improved skills and accumulated wealth, with which they facilitate economic development in their home region. it is evident that a broad migration in both directions will significantly contribute to improvements in productivity and economic activity within the eu. it will improve the level of education, the transfer of know - how from country to country and networking. these matters must be taken seriously and must be emphasised, even when faced with the problems associated with migration. for the sake of balance it is, of course, important to aim at relatively modest net migration flows. it is evident, for example, that population ageing will affect all eu countries ; it is unlikely that any of them will be able to handle the challenge primarily by attracting young population from other eu countries. migration is – and of course has to be – primarily market - driven. to the extent that changes in the production structure seem unavoidable, they should not be retarded through economic policy ; rather, support should be provided in the event of problems caused by these changes. problems in the transition period must also be acknowledged, but the advantages generated as a result of the changes should be emphasised. member states and the european commission have already provided wide support to the free movement of labour by removing obstacles that limit migration and introducing active measures that facilitate migration. support should be channelled to workers rather than work places. re - education as well as occupational and geographical support and security in connection with migration are key measures that governments should take in order to facilitate the reallocation of labour force. the ecb and other central banks within the eu can enhance the regional and professional allocation of labour force by improving the integration and efficiency of financing markets and payment systems throughout the area. this development work must naturally be shared by governments. to conclude, there still remains much to be done to improve the situation.