STRASBOURG, France -- In October 1998, just before the start of the European Monetary Union, the Governing Council of the European Central Bank (ECB) adopted a stability-oriented monetary policy strategy comprising three elements. The first was a commitment to the primary goal of the ECB -- safeguarding price stability. Price stability was defined as an annual increase in the price level of no more than 2 percent over the medium term.
The other two elements served as a means of assessing risks to price stability and soon became famous under the headline of "two pillars":
(1) Analysis of information from various monetary and credit aggregates for figuring out risks to price stability over the medium to long run.