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European Central Bank

The European Central Bank (ECB) in Frankfurt am Main is the central bank of the European Union, in charge of monetary policy for the 12 countries that use the new euro currency.

The ECB is known by different initials in different languages:

The first head of this institution was Wim Duisenberg, the former president of De Nederlandsche Bank, the Dutch national bank, and former finance minister of The Netherlands. He was succeeded by Jean-Claude Trichet in November 2003.

Table of contents
1 Goals and instruments
2 European Central Bank: Organization
3 European System of Central Banks (ECSB)
4 Criticisms on the Hardwiring (Antidemocratic nature) of the ECB
5 External link

Goals and instruments

The main goal of the BCE is to keep inflation stable. Currently (2002), the target was to keep inflation below 2% in the eurozone. For keeping prices stable, the BCE may cut or raise rates.

European Central Bank: Organization

The ECB is governed by a board of directors, headed by a President, and a board of governors, consisting of the members of the board of directors and representatives of the other central banks in the ESCB.

The organization of the ECB is modelled on that of the German Bundesbank and Landsbanks.

European System of Central Banks (ECSB)

The European System of Central Banks (ESCB) is comprised of the European Central Bank (ECB), and the national central banks of the fifteen member-states of the European Union. The term "Eurosystem" is used to designate the ECB and the central banks of the member-states that have adopted the euro.

The central banks of the member-states not participating in the Eurozone, while part of the ESCB, have a special status: they are entitled to conduct their own national monetary policies, but not to take part in deciding or implementing monetary policy of the eurozone.[1]

In accordance with the Treaty establishing the European Community and the Statute of the European System of Central Banks and of the European Central Bank , the principal objective of the Eurosystem is to maintain price stability. Without losing sight of this objective, the Eurosystem lends its support to the general economic policies of the Community and acts in accordance to the principals of an open market economy. [1]

The Eurosystem's primary objective is the maintenance of price stability. It meets its objectives through :

The process of decision-making in the Eurosystem is centralised through the decision-making bodies of the ECB, namely the Governing Council and the Executive Board. As long certain member-states have not yet adopted the euro, there remains a third decision-making body, the General Council (current members of the decision-making bodies of the ECB).[1]

Source for this section: European Central Bank website, Frankfurt am Main,Germany. [1]

Criticisms on the Hardwiring (Antidemocratic nature) of the ECB

Critics assert that the economic goals of the ECB are hard-wired to be secretive and independent from most citizens of the European Union, and to be isolated from feedback mechanisms regarding the influence of the money economy on human rights violations or the natural environment.

Like most institutions, the ECB does not propose its decisions on wiki pages. After publication of its actions and decisions, ECB web pages do not solicit direct comments by citizens.

European citizens may influence the policy decisions of the ECB very indirectly via the formal, national democratic electoral process. However, even if changes in economic assumptions are expressed via formal democratic means, elected politicians have very little power to transmit these changes to the ECB - the ECB is hard-wired.

External link