Although the Maastricht Treaty clearly established maintaining price stability as the primary objective of the ECB, it did not define what "price stability" actually means. With this in mind, in October 1998 the Governing Council of the ECB announced a quantitative definition of price stability: "a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2%". The Council also specified that price stability "is to be maintained over the medium term". Indeed, the Governing Council aims to maintain inflation rates at levels below, but close to, 2% over the medium term.
With the adoption of the "Treaty on the Functioning of the European Union (Lisbon Treaty, 2009)", price stability becomes an objective of the Union.
MP.002 01/12European Central Bank