While the Treaty clearly establishes the primary objective of the ECB, it does not give a precise definition of what is meant by price stability. The ECB’s Governing Council has announced a quantitative definition of price stability:
"Price
stability is defined as a year-on-year increase in the Harmonised Index of
Consumer Prices (HICP) for the euro area of below 2%."
The
Governing Council has also clarified that, in the pursuit of price stability,
it aims to maintain inflation rates below, but close to, 2% over the medium
term.
Article 2
Of the EU Treaty states that the EU aims to promote "economic and social
progress and a high level of employment and to achieve a balanced and
sustainable development." The Eurosystem contributes to these objectives
by maintaining price stability. In addition, in pursuit of price stability, it
takes these objectives into account. Should there be any conflict between the
objectives, the maintenance of price stability must always be given priority by
the ECB.
My point
is: the ECB's mandate is not set in stone. They've decided what it is. The
Governing Council could at any time vote and announce to target 3% instead of
below 2%.
Previously on MoreLiver’s:
Roundups
News
roundup – Between
The Hedges
The 6am Cut
London – alphaville
/ FT
Emerging
Markets Headlines – beyondbrics
/ FT
MORNING BRIEFINGS
Today's
update on Eurozone inflation for December will likely confirm the flash
estimate's 2.2 percent annual pace, while US industrial production growth will
probably slow in December and the NAHB Housing Index is set to stay near a
seven-year high.
European
markets are expected to open mostly higher Wednesday. The World Bank has
sharply lowered its 2013 global economic growth forecast. Meanwhile, markets
await Eurozone and US inflation data due later today.
Danske Daily – Danske
Bank (pdf)
According
to Juncker the euro exchange rate is dangerously high. EUR has weakened
overnight and JPY has continued to strengthen on the back of yesterday’s
comments from Japan’s Minister of Economics. Main focus today US CPI, Fed’s Beige Book and Q4 earnings.
Aamukatsaus – Nordea (pdf)
Piristyviä vähittäiskauppalukuja USA:sta. Saksan talous
supistui vuoden lopulla. Saksan odotettua heikompi talouskasvu painoi euroa
Aamukatsaus – Tapiola
(pdf)
Osakkeet jatkoivat eilen sivuttaisliikkeessä,
vähittäismyynti USA:ssa odotuksia vahvempaa, mutta Saksan BKT-luvut olivat
vähemmän rohkaisevat. Tänään paljon makrolukuja sekä euroalueelta kuin USA:sta.
Talvivaara päivitti tuotantolukujaan, ilmoitti samalla lomautuksista. Osakefutuurit
nollassa, indikoiden flättiä avausta pörssiin.
Markkinakalenteri – Nordnet
Markkinakalenteri – Taloussanomat