President's summing up of the position of the Governing Council

The European Central Bank (ECB) confirms its position of 'wait and see' with regard to its monetary policy stance. In an environment of increased uncertainty about the global economy and its impact on the euro area, the Governing Council is carefully assessing whether and to what extent upward risks to price stability will continue to decline.

The ECB has the primary objective of maintaining price stability. Within its forward-looking strategy, the Governing Council has raised central bank interest rates to contain increasing inflation risks and to bring inflation back to levels below 2 % over the medium term. This policy has retained credibility as demonstrated by continuing low inflation expectations. It is important for economic growth that the households of the euro area can rely on price stability preserving their purchasing power and, therefore, supporting solid domestic demand.

Information from the first pillar shows that money growth has been on a downward trend since the spring of 2000, indicating that upward risks to price stability from the monetary side have receded. As for the second pillar, somewhat lower real GDP growth this year will contribute to a reduction in domestic upward price pressures. On the other hand, owing to the risk of second-round effects from past oil price increases, wage developments need to be monitored carefully.

This statement was distributed today by Mr. Jean-Claude Trichet and Mr. Ernst Welteke on the occasion of a joint press conference during the French/German Finance Meeting in Rouen, France.