Institutions
Euro area consists of the EU countries that have adopted the euro. Since 1 January, 1999, the European Central Bank (ECB) has been responsible for conducting monetary policy for the euro area.
The creation of the euro area and of a new supranational institution, the ECB, was a milestone in the long and complex process of European integration. The euro area came into being when responsibility for monetary policy was transferred from the national central banks of 11 EU Member States to the ECB in January 1999. Greece joined in 2001, Slovenia in 2007, Cyprus and Malta in 2008. Slovakia in 2009 and Estonia in 2011.
The European System of Central Banks (ESCB) comprises the ECB and the national central banks of all EU Member States whether they have adopted the euro or not.
The Eurosystem comprises the ECB and the national central banks 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.
- Basic tasks of the Eurosystem 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;
- the promotion of the smooth operation of payment systems.
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 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 national central banks (NCBs) perform almost all operational tasks of the Eurosystem. In doing so, they enact the decisions made by the ECB, execute monetary policy operations, perform intermediary role between the ECB and national economy, participate in the management of ECB foreign reserves. NCBs are capital holders in the ECB.
More on EMU monetary policy - home page of the European Central Bank
