Introduction.
The culmination of European Union’s Economic and monetary union formation is enforcement of single currency – euro, and foundation of European Central bank. The European Central bank together with other Central banks of European Union Member States, which fully take part in Economic and monetary union and have introduced euro, compose Eurosystem. The main aim of Eurosystem actions is provision of price stability by the way of monetary policy. The European Central bank has the leading part in achieving of this aim, because it is fully responsible for formulation and implementation of monetary policy in euro zone or in Member States of Economic and monetary policy.
The foundation of European Central bank and introduction of euro is last one of three stages of Economic and monetary union establishing in European Union. The aim of Economic and monetary union is to complete single market (it is enforced already in 1st January 1993), which could be characterized by free movement of persons, commodities, services and capital, common competition policy , single currency (euro), common independent central bank (ECB) and common monetary policy. In that way Economic and monetary union already now is the innermost monetary union, comparing with all preliminary efforts of European economic and monetary integration.
Because of very important role of European Central bank in the Economic and monetary union, it is important to become acquainted with the main aims of European Central bank, with its structure, tasks, objectives, principles, competences and operational framework.
1. The European Central Bank – what is it?
The ECB is the central bank for Europe's single currency, the euro. The ECB’s main task is to maintain the euro's purchasing power and thus price stability in the euro area. The euro area comprises the 12 European Union countries that have introduced the euro since 1999. – Austria, Belgium, France, Greece, Italy, Ireland, Luxembourg, Netherlands, Portuguese, Finland, Spain and Germany.
The legal basis for the single monetary policy is the Treaty establishing the European Community and the Statute of the European System of Central Banks and of the European Central Bank. The Statute established both the ECB and the European System of Central Banks (ESCB) as from 1 June 1998. The ESCB comprises the ECB and the national central banks (NCBs) of all EU Member States whether they have adopted the euro or not.
The ECB was established as the core of the Eurosystem and the ESCB. The ECB and the national central banks together perform the tasks they have been entrusted with. The ECB has legal personality under public international law. The Eurosystem comprises the ECB and the NCBs of those countries that have adopted the euro. The Eurosystem and the ESCB will co-exist as long as there are EU Member States outside the euro area. The euro area consists of the EU countries that have adopted the euro.
1.1. Objectives
"The primary objective of the ESCB shall be to maintain price stability". "Without prejudice to the objective of price stability, the ESCB shall support the general economic policies in the Community with a view to contributing to the achievement of the objectives of the Community. The objectives of the Union are a high level of employment and sustainable and non-inflationary growth.
1.2. Tasks
The tasks of the ESCB and of the Eurosystem are laid down in the Treaty establishing the European Community. They are specified in the Statute of the European System of Central Banks (ESCB) and of the European Central Bank (ECB). The Statute is a protocol attached to the Treaty.
The Treaty text refers to the “ESCB” rather than to the “Eurosystem”. It was drawn up on the premise that eventually all EU Member States will adopt the euro. Until then, the Eurosystem will carry out the tasks.
Basic tasks
According to the Treaty establishing the European Community, the basic tasks are
• the definition and implementation of monetary policy for the euro area;
• the conduct of foreign exchange operations;
• the holding and management of the official foreign reserves of the euro area countries (portfolio management).
• the promotion of the smooth operation of payment systems.
Further tasks
• Banknotes: the ECB has the exclusive right to authorise the issuance of banknotes within the euro area.
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