Excerpts from the Account of the monetary policy meeting of the Governing Council of the European Central Bank, held in Frankfurt am Main on Tuesday and Wednesday, 14-15 April 2015:
Against this background, members generally agreed that a steady hand and the firm implementation of the measures decided in January 2015 would best serve to support the economic recovery and a return of inflation towards 2%. There was hence no need to consider any change in the monetary policy stance at present or to reconsider any of the parameters of the PSPP decided on 22 January 2015. This also applied to the understanding that policy rates had reached their effective lower bound, as had been discussed and affirmed on previous occasions. It was important to implement firmly the ECB’s expanded APP as announced in order to reap its full effects in terms of euro area output and inflation developments. Indeed, the positive economic outlook for the euro area, as embedded in the March ECB staff projections, depended on the full implementation of the programme and was still subject to a number of downside risks and uncertainties.
Overall, members agreed that emphasis needed to be placed on a steady course of monetary policy with a focus on the firm implementation of the Governing Council’s recent monetary policy decisions. The Governing Council therefore reaffirmed its intention to conduct purchases until the end of September 2016 and, in any case, until a sustained adjustment was visible in the path of inflation consistent with the Governing Council’s aim of achieving inflation rates below, but close to, 2% over the medium term. It was also stressed that, when carrying out its assessment, the Governing Council would follow its monetary policy strategy and concentrate on trends in inflation, looking through unexpected outcomes in measured inflation in either direction if judged to be transient and to have no implication for the medium-term outlook for price stability.
At the same time, a strong signal needed to be sent to euro area governments urging them to press ahead with structural reforms and to take measures to improve the business environment. Only with such complementary action could the full benefits of the monetary policy measures be reaped. Swift and effective implementation of appropriate reforms in the euro area would not only lead to higher sustainable growth in the medium to long term but also raise expectations of permanently higher incomes and encourage households to expand consumption and firms to increase investment already in the near term. In addition, fiscal policies should support the economic recovery while remaining in compliance with the Stability and Growth Pact.