The European Central Bank (ECB) and German Bundesbank Governor Jens Weidmann said on Friday:
It is possible to reduce the decline in export-dependent industries.
Changing inflation rates above the target is inconsistent with the ECB’s strategy, which could lead to credibility risks.
It cannot be argued that monetary policy has achieved its objectives if policy-making creates long-term risks to price stability by increasing imbalances in monetary policy.
We should not be so confident about the role that macro-prudential policy can play in addressing systemic risks, and this approach to policy is still in its infancy.