The tasks of the European System of Central Banks (ESCB) and the
Eurosystem are laid down in the Treaty on the Functioning of
the European Union. They are specified in theStatute of the
European System of Central Banks and of the European Central Bank. The Statute
is a protocol attached to the Treaty.
The Treaty on the Functioning of the European Union generally
refers to the ESCB rather than to the Eurosystem, since it was drawn up on the
premise that all EU Member States would eventually adopt the euro. The
Eurosystem is made up of the ECB and the national central banks (NCBs) of the
EU Member States whose currency is the euro, whereas the ESCB comprises the ECB
and the NCBs of all EU Member States (Article 282(1) of the Treaty). As long as
there are EU Member States whose currency is not the euro, it will be necessary
to make a distinction between the Eurosystem and the ESCB.
Objectives
Article 127(1) of the Treaty defines the primary objective of the
Eurosystem:
"The primary objective of the European System of Central
Banks […] shall be to maintain price stability".
It continues as follows: "Without prejudice to the objective
of price stability, the ESCB shall support the general economic policies in the
Union with a view to contributing to the achievement of the objectives of the
Union as laid down in Article 3 of the Treaty on European Union."
The European Union has multiple objectives (Article 3 of the
Treaty on European Union), which include the sustainable development of Europe
based on balanced economic growth and price stability, and a highly competitive
social market economy, aiming at full employment and social progress.
Consequently, price stability is not only the primary objective of the ECB’s
monetary policy, but also an objective of the European Union as a whole. Thus,
the Treaty on the Functioning of the European Union and the Treaty on European
Union establish a clear hierarchy of objectives for the Eurosystem, making it
clear that price stability is the most important contribution that monetary
policy can make to achieving a favourable economic environment and a high level
of employment.
Basic tasks
According
to Article 127(2) of the Treaty on the Functioning of the European Union, the
basic tasks to be carried out through 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 (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.
- Statistics: in cooperation with the NCBs, the ECB
collects statistical information necessary in order to fulfil the tasks of
the ESCB, either from national authorities or directly from economic
agents.
- Financial stability and supervision: the Eurosystem
contributes to the smooth conduct of policies by the competent authorities
as regards the prudential supervision of credit institutions and the
stability of the financial system.
- International and European cooperation: the ECB maintains working
relations with relevant institutions, bodies and fora, both within the EU
and at the global level, in respect of the tasks entrusted to the
Eurosystem.
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