The European Central Bank

Faculty of Business Management

Prof. Dr.

MACROECONOMICS

Winter Semester 2011

The European Central entrust

score :

The European Central Bank

The ECB is the central bank for Europes single currency, the euro. The ECBs main task is to concord the euros purchasing power and gum olibanum price stability in the euro theatre of operations. The euro area comprises the 17 European Union countries that have introduced the euro since 1999.

Tasks

The tasks of the ESCB and of the Eurosystem are laid work through in the pact establishing the European Community. They are specified in the jurisprudence 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 school text refers to the ESCB rather than to the Eurosystem. It was drawn up on the premise that lastly all EU Member States impart adopt the euro. Until then, the Eurosystem will carry out the tasks.

Objectives

The primary objective of the ESCB shall be to maintain price stability.

And: without prejudice to the objective of price stability, the ESCB shall apply the general economic policies in the Community with a heap to contributing to the achievement of the objectives of the Community as laid down in Article 2. (Treaty article 105.



1)

The objectives of the Union (Article 2 of the Treaty on European Union) are a high level of employment and sustainable and non-inflationary growth.

Basic tasks

According to the Treaty establishing the European Community (Article 105.2), the basic tasks are the definition and implementation of fiscal policy for the euro area; the conduct of foreign exchange trading 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 grievous bodily harm right to authorise the issuance of banknotes within the euro area.

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