Improving the ECB's policy strategy

The ECB can fulfil its mandate better and contribute to a stronger Europe by adopting sensible rules instead of relying on discretionary decision-making. A simple rule for the policy rate can promote systematic monetary policy and protect against significant policy errors. Ending the reliance on credit rating agencies for determining the collateral eligibility of government debt can improve the functioning of government bond markets and lower financing costs for governments. With sensible rules, the ECB can secure price stability and avoid unwarranted fragility in government bond markets. Alleviating fiscal stress can free fiscal resources for public investment aimed at boosting productivity, greening the economy and strengthening European defense. Within its mandate, the ECB can serve Europe better than in the past.