Issing, a member of the ECB's executive board, was addressing delegates at the Euromoney International Bond Conference.
The ECB, he said, was not satisfied with current inflation levels of over 2%, and expected to bring the figure down below the target level of 2% by the end of the year. Price stability, defined as year on year harmonised CPI growth of below 2%, was a "key objective", said Issing. It provided the yardstick against which the new institution should be judged.
He rejected the idea that the euro area should be prepared to stand in for the US as the driver of world economic growth, saying that the idea was misleading. "The best way to encourage sustainable non-inflationary growth in the world economy," he said, "is to concentrate on price stability at home."
There has been a change in the outlook for the euro area following the slowdown in US growth and Japan's continuing economic malaise, but although the international outlook is now weaker, Issing expects moderate global GDP growth. Despite the US slowdown, and weaker levels of euro-zone monetary and credit growth, Issing found room for optimism. "Although we are affected by outside influences," he said, "the euro area is a fairly closed economy. The outlook for euro area growth is still positive."
Although the introduction of the euro and the production of coinage and banknotes was proving to be "the greatest logistical exercise ever carried out in peacetime", the ECB, he said, had retained the confidence of economists and bankers in its medium term forecasts of low inflation, and had established the euro as a safe, stable currency.