The Eurosystem

As all the Member States of the EU have not yet introduced the euro, it is necessary to distinguish between the ESCB and the Eurosystem which groups together the ECB and the NCBs of the 16 countries which have adopted the euro (Austria, Belgium, Cyprus, Germany, Greece, Finland, France, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Spain, Slovakia and Slovenia). The main objective of the Eurosystem, and of the ESCB, is to maintain price stability. To achieve that end, a single monetary policy is implemented within the euro area. As soon as all the EU countries have adopted the euro, the Eurosystem and the ESCB will be one and the same thing.

The monetary policy of the euro area is defined by the ECB Governing Council in which each of the Governors of the NCBs of the euro area and the members of the Executive Board of the ECB has a seat. The ECB Executive Board is composed of the President and the Vice-President of the ECB and of four other members who are appointed by the Heads of State or of Government of the Member States which have adopted the euro.

Monetary policy is decided by the ECB and implemented by the NCBs on a decentralised basis (but in identical conditions throughout the euro area). The BCL contribution is important, because it transfers on average more than 10% of the liquidity of the euro area to its counterparties.

The ECB must be consulted on any draft European or national legislation in its fields of competence (monetary issues, payment means, monetary and financial statistical data collection, payment systems…). The ECB may give opinions on its own initiative. The NCBs participate directly in this consultation process and in the preparation of the ECB’s opinions.