price stability. inflation is currently very low. where ’ s the harm in that? it is, above all, a question of confidence. the ecb is committed to maintaining price stability, by which we mean keeping inflation below, but close to, 2 % – and we have achieved this objective. average inflation since the introduction of the euro is 2. 03 %. this has contributed to economic stability in europe. if we were to miss our objective, people would start to question our commitment. that also holds if we were to tolerate inflation rates that were too low. we cannot risk such a loss of confidence. the main reason for the current low level of inflation is price and cost adjustment in the crisis countries, thereby enabling these countries to become more competitive. it is good that the economies needing to regain competitiveness adjust. but the adjustment is much easier if inflation in the euro area as a whole stands at 2 %, rather than, say, 1 %. bis central bankers ’ speeches why? we know from experience that, at least in europe, it is very difficult to cut nominal wages. if prices are rising, you get the desired effect – the cost of labour declines in real terms – just by holding nominal wages constant. this is why there is no major central bank in the world that seeks to eliminate inflation completely. inflation should be at a low, but positive level. the inflation rate in the euro area is currently at 0. 9 %. if we take you at your word, the ecb is in fact not doing its job. it is true that, as a result of the weak economy, there is little scope for prices to increase. but we expect the rate of inflation to come back to 2 % over the medium term. according to your staff projections, inflation will be below the target until 2015. what do you mean by medium term? we are not giving a more precise time frame, but we are certainly not talking about a decade or a generation. if the countries in the south have lower inflation rates and the ecb wants to keep overall inflation at 2 %, then that means logically that germany has to accept higher inflation. it is not a goal of our policy to artificially increase inflation in germany. but if the german economy keeps doing well, and wages increase, inflation will naturally also increase somewhat. that is a result of market decisions. what is important for us is that average inflation in the euro area as a whole returns to our objective. and what

benoit coeure : interview in die zeit interview with mr benoit coeure, member of the executive board of the european central bank, in die zeit, conducted by mr mark schieritz and published on 9 december 2013. * * * mr cœure, do you know what the interest rate on savings accounts in germany is? very low, probably close to 0 %. that ’ s correct. some banks pay 0. 25 % or even less. can you relate to savers in germany being annoyed that the european central bank ( ecb ) is making them foot the bill for the crisis? rates are very low because the euro area economy is weak. take the example of low long - term interest rates on german government bonds, which are important for life insurance contracts and pensions. why exactly is the weak economy responsible for low rates? if growth is weak, there are few profitable investment opportunities. as savings need to be invested in order to achieve returns, this means that returns are low. low market rates also, however, create the conditions for new growth and this will also boost future returns on savings. so you are saying that german savers benefit from the ecb ’ s low rates? my message is : it is important to differentiate between long - term rates for savers and the policy rate of the ecb. long - term rates are low because the economy is weak. in such circumstances, the ecb has to set its policy rate in such a way as to ensure price stability. thereby we support the economy and create the conditions for profitable investment opportunities – and this is also of benefit to german savers. so what would you say to germans who are worried about their retirement provision? i would tell them that the best way to improve the return on their savings is for the crisis to be solved as quickly as possible. this means that the economic reforms have to be implemented in the stressed countries, but it also means that we have to complete the measures designed to make the euro area as a whole safer. we need, above all, a functioning banking union so that german government bonds are not the only safe haven assets in the euro area anymore. if germany still had the deutsche mark, interest rates would be higher. i don ’ t want to speculate on hypothetical issues. our currency is the euro. but look at switzerland : the country has its own currency and interest rates are extremely low nevertheless, namely because investors consider it a safe haven like germany. you mentioned