This is the first ECB Annual Report covering a full year of Eurosystem monetary policy. It also deals with the other activities of the Eurosystem and the European System of Central Banks.
Looking back on the first year of the euro, there are grounds for experiencing a sense of satisfaction. The single monetary policy started under reasonably favourable conditions inherited as a result of sound policy measures adopted in the run-up to the introduction of the euro. In addition, the Eurosystem’s monetary policy strategy proved to be a valuable tool both for making monetary policy decisions and in explaining these decisions to the general public.
Throughout the year, the Eurosystem was therefore able to focus on maintaining the environment of price stability, with inflation running on average at just over 1%. The fact that prices could be kept stable in the euro area is an achievement that should not be underestimated. An examination of the not too distant past should make that clear. In the past half century price stability has been the exception rather than the rule. The Eurosystem will, therefore, continue to explain the importance of its primary objective of maintaining price stability in the euro area and its monetary policy will continue to be conducted with a view to achieving this objective. [...]