The European Monetary Union (EMU) yesterday launched Europe's first transnational central bank with a pledge to keep inflation under control and the bank as accountable as possible.
Wim Duisenberg, president of the European Central Bank (ECB) said a good start to reigning in inflation in the 11-country EMU would be to keep a watchful eye on prices during the run-up to next year's launch of the single European currency, the euro.
'It is essential that policies in the remainder of this year aim at maintaining the current low levels of inflation in the euro area,' Mr Duisenberg said.
He also said the ECB's operations should be as accountable and as transparent as possible in order to bolster the EMU's financial markets.
Recognisable policies carried out by the ECB would help the EMU's financial markets make more accurate judgments about future policies, the central bank chief said.
'Demonstrably stable prices are more effective in this regard than a million words in speeches, interviews and official publications,' he said.
Mr Duisenberg's comments came amid considerable debate about not only how often and how detailed the ECB should be making public its internal operations to financial markets but also how the central bank intends to conduct monetary policy.
Some critics also point out that the ECB does not have sufficiently reliable statistics at its disposal from the 11 EMU countries to conduct the monetary targeting of inflation.