The basic mission of the Eurosystem is to maintain price stability. In this context, the Governing Council adopted a monetary policy strategy providing for a quantitative definition of price stability. The main reference is the Harmonised Index of Consumer Prices (HICP). The annual increase of this index shall be below, but close to, 2% in the medium term and over the whole euro area. The fact that price stability is defined with regard to the whole euro area implies that the Governing Council does not take decisions according to the inflation rates existing in the different countries.
In order to be able to take decisions on the basis of information which is as exhaustive as possible, the Governing Council bases them on two pillars: the economic analysis and the monetary analysis. By choosing to make public the references which lead up to its decisions, the Eurosystem strengthens the credibility of its action.
If you want to learn more about it:
Or you can visit the ECB website.
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