Monetary Policy of European Central Bank

The European Central Bank is the bank for Europe's single currency, the euro. The European Central Bank’s main task is to maintain the euro's purchasing power and thus price stability in the euro area. The euro area comprises the 17 European Union countries that have introduced the euro since 1999. And the primary objective of the European Central Bank is to maintain price stability, but to deal with price stability, Central Bank uses monetary policy. First of all, the primary objective of the Eurosystem is to maintain price stability. The Eurosystem comprises the ECB and the national central banks 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. Without prejudice to the primary objective of price stability, the Eurosystem has to support the general economic policies in the Union. In pursuing its objectives, the Eurosystem has to act in accordance with the principle of an open market economy with free competition, favoring an efficient allocation of resources.