mitigated because pspp - eligible bonds need to satisfy minimum credit quality requirements. overall, a proper weighting of costs and risks vs benefits must take into account that the maintenance of price stability is the primary objective for monetary policy. 2 accordingly, pspp is also proportionate stricto sensu. monetary financing prohibition as strict and important limit the principle of proportionality works as a disciplining device for the ecb in choosing the instruments. in addition, however, the legal framework provides further, and even stricter, limits. an important case in point is the prohibition of monetary financing as enshrined in article 123 of the treaty. while this reads prima facie as a constraint on monetary policy, it may also strengthen the maintenance of price stability. in fact, historical evidence has pointed to the negative consequences which historically have been associated with central banks ’ attempts to minimise the financing burden of governments. and literature has shown that high inflation, which can arise from such subordination of monetary policy to fiscal needs, is in turn detrimental for growth. 3 therefore, the monetary financing prohibition rules fiscal considerations out which could distract the governing council from its core monetary policy task. it helps to protect the ecb from political pressures. the ecb ’ s purchases of public - sector debt instruments as part of the app are a good example how this prohibition is applied : first of all, we do not buy government bonds in the primary market – which is explicitly forbidden under article 123 – but only in the secondary market. purchases of public - sector bonds in the secondary market in turn are forbidden, if they circumvent the monetary financing prohibition, i. e. have an effect equivalent to that of purchases in the primary market. we have made sure that this is not the case by putting in place several safeguards4. as one of these safeguards, pspp purchases adhere to a blackout period, i. e. the eurosystem does not buy around the date of a new issuance, which facilitates the formation of market prices for pspp - eligible securities. furthermore, the relevant securities are also subject to an issue share limit and an issuer limit, which preserve market functioning. these features are compliant with the requirement to act in accordance with the principle of an open market economy. when weighting the “ benefit ”, though, one may consider that as the usage of these instruments is expanded to very high proportions, they may start to display diminishing returns at some

press releases in january. while i am on the subject of the media, let me just say a personal word to reporters and editors who have covered the euro story. i think that you have done a remarkable job of making people realise that they need to learn and to prepare. on this very special day for europe and our new money, i want to conclude with a tribute to others who have made this moment possible. it is a tribute to europe ’ s leaders over the past decades. they are true leaders because they had the foresight to take bold actions that would make europe a place where people, ideas, and commerce would intermingle. they had the vision to see that a common currency would be an essential part of that, and would represent a formidable leap in the european integration process. we are marking, and making, that leap today. and now, i would like to present one other “ reward ” to the young people with us today. when you entered our euro superstar competition, you had a glimpse of a future world - or at least, a very creative idea of one. we thought that you winners deserved to see more of that future. so, i am happy to invite you to watch as that world comes alive today, with tomorrow ’ s currency.