Why not live in truth? The Economist asks the European Central Bank to bring its rhetoric about its policies into line with the reality of its policies. It's not going to happen--there are those on the ECB who wish to push the policies back toward the rhetoric, and who would regard acknowledging what the policies have been as a substantive defeat:

Economist.com: ...a slightly easier inflation target—one point either side of 2.5%, say—and the demolition of the monetary pillar would not even require the ECB to change its behaviour very much. Broadly, it would merely codify what the ECB already does. Studies suggest that, whatever the Maastricht treaty says, it has acted roughly in the same way as other leading central banks: ie, as if it were responding to changes in both inflation and economic activity in the euro area. Its interest-rate cut this month was made in the face of inflation stubbornly higher than 2%. The cut was not a reaction to monetary trends, but to slackness in the real economy. A closer match between what the bank says its strategy is and what it actually does would not harm its credibility, but strengthen it. A change is due.

CENTRAL banks, those notoriously opaque seats of power, rarely pay heed to their critics. The European Central Bank, however, has recently given signs of being a surprising—and welcome—exception. ECB watchers have long complained that the bank is a poor communicator, but when it cut interest rates earlier this month, it had prepared financial markets thoroughly for its move. Next, the bank at last produced a proposal for reforming its voting rules when the euro takes in new members. And now the ECB is reviewing (albeit with no promise of change) the very rules by which it steers monetary policy: its definition of its primary objective of price stability, and the strategy it uses to pursue this goal. “The ECB has an open mind,” says Lucas Papademos, its vice-president. After four years, it is indeed time for a careful rethink.

You can see why the bank might contemplate change. The euro area is stalling: GDP grew by only 0.3% in the third quarter, and may slow even further; the region's three biggest economies—Germany, France and Italy—are all wheezing. Fiscal policy is no help, constrained as it is by the European Union's stability and growth pact. Some countries have already burst the pact's 3% ceiling on budget deficits. The European Commission, whose president, Romano Prodi, has called the pact “stupid”, has proposed some reforms, but the rules will stay restrictive.

The ECB's contribution to reviving Europe's economies in this troubled year has been slight. Although it had been clear for months that growth would be weaker than was expected at the start of the year, a rate cut does not seem to have been seriously contemplated until November. Arguably, the bank's policy objective is defined too tightly, and has held the ECB back from reducing rates sooner.

Although the ECB's duty to maintain price stability is laid down in the Maastricht treaty, the definition is left up to the bank. The ECB has chosen an inflation rate of less than 2%: more ambitious, for example, than the Bank of England's target of 2.5%. This toughness is largely a legacy from the Bundesbank, Germany's central bank, created after the second world war, when memories of hyperinflation and the damage it had wrought were clear. When the euro was born, the Germans insisted that the euro area's central bankers should share their disdain for inflation. The tightness of the target may have made the ECB too slow to cut interest rates this year: euro-area inflation has been persistently, though not far, above 2%. Ironically, it is Germany that is suffering most. The German economy is growing at best feebly, and inflation there is only 1.1%.

Just as worrying, the ECB's anti-inflation strategy is sometimes hard to follow. This strategy also bears the stamp of the Bundesbank. It rests on what the bank calls two “pillars”. The first is the rate of growth of the broad-money supply, M3. This reflects standard monetary theory: that monetary growth is a good predictor of future inflation. The second pillar includes everything else that might affect inflation: aggregate demand, capacity utilisation, wage growth and so on.

Many economists have found the bank's emphasis on the money supply puzzling, not to say confusing. Monetary growth has long been far above the bank's “reference value”—nothing so crude as a target, please—of 4.5%. This has to be explained away, month after month: for over a year, a portfolio shift from equities into cash, the result of stockmarket uncertainty, has been the ECB's favoured (and, to be fair, reasonable) explanation. Little is gained by giving money its own pillar. Nobody doubts that central banks should keep a close eye on monetary developments. Yet other central banks manage to watch, discuss and report on monetary and credit growth without sharing the ECB's fetish.

Granted, there would be dangers in changing course now. The ECB is still a young institution. Loosening the inflation target so soon might suggest that it was soft on inflation, or at any rate indecisive. It would also be wrong to assume that an easier target, although it might this year have led to swifter interest-rate cuts, would necessarily raise the euro area's long-run growth rate. It would certainly not absolve Europe's politicians from the duty to undertake structural reforms of their economies—as it happens, one of the ECB's favourite themes. It would be catastrophic for the ECB's credibility if it fell into the habit of changing its target every few years to match the economic weather. Similarly, knocking the two pillars into one might smack of strategic inconstancy. Continual revamping of the bank's approach might make people suspect that the bank didn't really have a strategy at all.

Yet the advantages of a change of tack would be greater. An easier inflation target, in a region that now has 12 countries and in a few years could have 20-plus, would reduce the risk of deflation (small, say some; significant, fear others) in any single member state. The two-pillar strategy, intended to make the ECB's policies clearer, has done the opposite.

A further advantage is that a slightly easier inflation target—one point either side of 2.5%, say—and the demolition of the monetary pillar would not even require the ECB to change its behaviour very much. Broadly, it would merely codify what the ECB already does. Studies suggest that, whatever the Maastricht treaty says, it has acted roughly in the same way as other leading central banks: ie, as if it were responding to changes in both inflation and economic activity in the euro area. Its interest-rate cut this month was made in the face of inflation stubbornly higher than 2%. The cut was not a reaction to monetary trends, but to slackness in the real economy. A closer match between what the bank says its strategy is and what it actually does would not harm its credibility, but strengthen it. A change is due.