PRICE STABILITY - A MAIN OBJECTIVE OF EUROPEAN MONETARY POLICY

Abstract

According to Article 127 of the Treaty on the Functioning of the European Union, the main objective of the European System of Central Banks is to maintain price stability. Through a monetary policy strategy, the Governing Council aims to stabilize inflation to the lowest level, below 2% in the medium term. The EU Member States have assumed the transposition of monetary policy into national policy and compliance with the inflation threshold. However, the implementation of European policies lies with the political decision-makers of each state, who most often place their interests above the interests of the Union. The research aims to analyse how the states have implemented European monetary policy. Monetary policy imposed an annual inflation rate of maximum 2%. In 2018, only 12 of the 19 European Monetary Union Member States managed to maintain the inflation rate below 2%.

Keywords

• eurozone
• inflation rate
• european monetary policy
• maastricht treaty