ECB European Central Bank
History of European Central Bank
ECB “Europe will not be complete at the minute or according to a single plan. It will be manufactured through solid successes which first create a de facto solidarity.” (Robert Schuman)
In 1951 six countries France, Germany, Belgium, Italy, Luxemburg and Netherland sign the treaty of Paris creating the European gold and steel community governed by the first supernational body the high authority. European leaders wanted to go further so on 25th of March 1957 they signed a treaty called EEC (The European Economic Community) and European Atomic Energy Community.
On May 1998 EU leader and finance ministers met in Brussels to decide which state has reached a sufficient degree of conversions and if they participated in the monitory union. They also appointed the 1st president of ECB William Dakin Burg and the other member of the 1st executive board. The ECB was established on the 1st of June 1998 replacing the EMI and taking over in front of offices together with older National Central Banks of the member state of the European Union and hence European Central Bank came into being.
“On the night of 31st December 1998, the Euro was born and the conversion rate of the participating in it became in a workable fix.”
Euro Become Official Currency
On the 1st of January on 1999 when the single currency was launched and authority of monitory policy was transferred from National Central Bank to the Governing Council to the European Central bank. Two years later on the 1st of January 2002, the new banknote and coins were also introduced. Race of having newest currency also started among the public. For three years Euro had been the official currency for banks, business and the financial market. But now it belongs to everyone.
Every country has a Central Bank issuing currency, managing monetary policy and making sure that the banking system is well-oiled and functioning smoothly. With the creation of Euro, European leaders decided that the currency needed its very own central bank. Headquartered in Frankfurt, it has President, currently Mario Draghi. The President is part of the executive board who oversees the day-to-day business. Its member are appointed by the European Council, which also selects high-level banking executions.
The ECB is an official institution overseeing the monetary affairs of the 19 countries of Europe. It’s independent of member state control but it is accountable to the public. The main role is to maintain price stability in the Eurozone. It has to keep the rate of inflation close to or below 2%. It is also exclusively in charge of issuing euros. And it sets the monetary policy for the Eurozone.
As the financial crises broke in 2008, the ECB had to navigate a few tough years. After the crises relented a fail-safe was set up. The banking Union harmonies financial stability to make banks crisis-proof. It places the ECB as the central prudential supervisor of a financial institution in the euro area.