Prof. Susanna Cafaro A.A 2014/2015 – Law Faculty. Università del Salento

What does it mean from a legal point of view?

 “ 4. The Union shall establish an economic and monetary union whose currency is the euro.”

 1. The Union shall have an institutional framework which shall aim to promote its values, advance its objectives, serve its interests, those of its citizens and those of the Member States, and ensure the consistency, effectiveness and continuity of its policies and actions.  The Union’s institutions shall be:  — the European Parliament,  — the European Council,  — the Council,  — the European Commission (hereinafter referred to as ‘the Commission’),  — the Court of Justice of the European Union,  — the European Central Bank,  — the Court of Auditors.

1. The European Central Bank, together with the national central banks, shall constitute the European System of Central Banks (ESCB). The European Central Bank, together with the national central banks of the Member States whose currency is the euro, which constitute the Eurosystem, shall conduct the monetary policy of the Union. 2. The ESCB shall be governed by the decision- making bodies of the European Central Bank. (…)

 (…) The primary objective of the ESCB shall be to maintain price stability. Without prejudice to that objective, it shall support the general economic policies in the Union in order to contribute to the achievement of the latter’s objectives A predetermined aim is what makes the difference between a technocratical and a political institution

The European Central Bank shall have legal personality. It alone may authorise the issue of the euro. It shall be independent in the exercise of its powers and in the management of its finances. Union institutions, bodies, offices and agencies and the governments of the Member States shall respect that independence.

 When exercising the powers and carrying out the tasks and duties conferred upon them by the Treaties and the Statute of the ESCB and of the ECB, neither the European Central Bank, nor a national central bank, nor any member of their decision-making bodies shall seek or take instructions from Union institutions, bodies, offices or agencies, from any government of a Member State or from any other body. The Union institutions, bodies, offices or agencies and the governments of the Member States undertake to respect this principle and not to seek to influence the

 Each Member State shall ensure that its national legislation including the statutes of its national central bank is compatible with the Treaties and the Statute of the ESCB and of the ECB.

 The European Central Bank shall adopt such measures as are necessary to carry out its tasks in accordance with Articles 127 to 133, with Article 138, and with the conditions laid down in the Statute of the ESCB and of the ECB.

 the definition and implementation of monetary policy for the euro area; monetary policy  the conduct of foreign exchange operations;foreign exchange operations  the holding and management of the official foreign reserves of the euro area countries (portfolio management).portfolio management  the promotion of the smooth operation of payment systems. payment systems

 Banknotes: the ECB has the exclusive right to authorise the issuance of banknotes within the euro area. Banknotes  Statistics: in cooperation with the NCBs, the ECB collects statistical information necessary for fulfilling the tasks, either from national authorities or directly from economic agents. Statistics  Financial stability & supervision: the Eurosystem contributes to the smooth conduct of policies pursued by the authorities in charge related to the prudential supervision of credit institutions and the stability of the financial system. Financial stability & supervision  International and European cooperation: the ECB maintains working relations with relevant institutions InternationalEuropean cooperation:  Banking Surveillance (new!)

 In accordance with these same Articles, those Member States whose currency is not the euro, and their central banks, shall retain their powers in monetary matters.

 1. The Governing Council of the European Central Bank shall comprise the members of the Executive Board of the European Central Bank and the Governors of the national central banks of the Member States whose currency is the euro.  2. The Executive Board shall comprise the President, the Vice-President and four other members

 the six members of the Executive Board, plus  the governors of the national central banks of the 17 euro area countries.

 to adopt the guidelines and take the decisions necessary to ensure the performance of the tasks entrusted to the Eurosystem;  to formulate monetary policy for the euro area. This includes decisions relating to monetary objectives, key interest rates, the supply of reserves in the Eurosystem, and the establishment of guidelines for the implementation of those decisions.

 The Governing Council usually meets twice a month at the Eurotower in Frankfurt am Main, Germany.  At its first meeting each month, the Governing Council assesses economic and monetary developments and takes its monthly monetary policy decision. At its second meeting, the Council discusses mainly issues related to other tasks and responsibilities of the ECB and the Eurosystem.  While the minutes of the meetings are not published, the monetary policy decision is explained in detail at a press conference held shortly after the first meeting each month. The President, assisted by the Vice-President, chairs the press conference

 the President  Vice-President and  four other members All members are appointed by the European Council, acting by a qualified majority.

 The President, the Vice-President and the other members of the Executive Board shall be appointed by the European Council, acting by a qualified majority, from among persons of recognised standing and professional experience in monetary or banking matters, on a recommendation from the Council, after it has consulted the European Parliament and the Governing Council of the ECB.

 Their term of office shall be eight years and shall not be renewable.  Only nationals of Member States may be members of the Executive Board

 to prepare Governing Council meetings;  to implement monetary policy for the euro area in accordance with the guidelines specified and decisions taken by the Governing Council. In so doing, it gives the necessary instructions to the euro area NCBs;  to manage the day-to-day business of the ECB;  to exercise certain powers delegated to it by the Governing Council. These include some of a regulatory nature.

 1. The President of the Council and a Member of the Commission may participate, without having the right to vote, in meetings of the Governing Council of the European Central Bank. The President of the Council may submit a motion for deliberation to the Governing Council of the European Central Bank.  2. The President of the European Central Bank shall be invited to participate in Council meetings when the Council is discussing matters relating to the objectives and tasks of the ESCB.

 The European Central Bank shall address an annual report (…) to the European Parliament, the Council and the Commission, and also to the European Council. The President of the European Central Bank shall present this report to the Council and to the European Parliament, which may hold a general debate on that basis.  The President of the European Central Bank and the other members of the Executive Board may, at the request of the European Parliament or on their own initiative, be heard by the competent committees of the EP

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