Eesti Pank / Bank of Estonia

The European Central Bank (ECB), established in June 1998 in Frankfurt-am-Main, took over the responsibilities of its forerunner, the European Monetary Institute (EMI). The European Central Bank implements monetary policy and fulfils other euro-related central bank tasks, in cooperation with the national central banks of the euro area.

The European Central Bank is a supranational institution and an independent legal entity. It has its own Statute, which has been added as a protocol to the Treaty establishing the European Union and which can be amended only by the mutual agreement of the Member States. Pursuant to the Treaty, the ECB has the sole right to authorise the issue of euro banknotes. There are 1,350 employees in the ECB from all 27 Member States.

Pursuant to the Lisbon Treaty, the ECB is now a body of the European Union (Articles 282-284 on the functioning of the European Union), while pursuant to the Treaty establishing the European Community it lacked such a status. In addition, the Lisbon Treaty provides that the members of the ECB Executive Board are selected and appointed by the European Council through qualified majority voting (Article 283 on the functioning of the European Union) and this may not be decided by agreement as was provided in the Treaty establishing the European Community.

The ECB's decision-making bodies are the Governing Council and the Executive Board. The Governing Council makes monetary policy decisions; the Executive Board implements them and is responsible for the daily management of the ECB. The third decision-making body of the ECB is the General Council, which will be operating until all the Member States have adopted the euro. The meetings of the ECB Governing Council, the Executive Board and the General Council are chaired by the President of the ECB or, in his absence, the Vice-President. The President participates in the meetings of the Eurogroup (the unofficial working group of the ministers of economy and finance from the euro area countries) and he is entitled to take part in the meetings of the Council of the European Union concerning the goals and duties of the Eurosystem.

The ECB Governing Council consists of the members of the ECB's Executive Board and the governors of the central banks of the euro area countries. The meetings are held twice a month - usually on every first and third Thursday of the month. Monetary policy issues are usually discussed only at the first meeting of the month. The President of the Council of the European Union and one member from the European Commission may also participate in the meetings, but only the members of the ECB Governing Council have the right to vote. Every member has one vote. The ECB's financial issues are an exception - the decisions are made by a simple majority. If the votes are divided equally, the President of the ECB has the deciding vote. The main duties of the Governing Council are the following:

- Development of the euro area monetary policy, i.e. setting the key interest rates of the euro area;
- Adoption of guidelines and decisions related to the performance of the tasks of the Eurosystem.

The ECB Executive Board consists of the President and the Vice-President of the ECB and four other members. The main duties of the Executive Board are the following:

-  Preparation of the Governing Council's meetings;
-  Implementation of the euro area monetary policy in accordance with the Governing Council's guidelines and decisions; instruction of national central banks;
-  Daily management of the ECB;
-  Exercising of powers (incl. regulatory powers) delegated to the Executive Board by the Governing Council.

The ECB General Council comprises the President and Vice-President of the ECB and the governors of the national central banks of the EU countries. Other members of the Executive Board, the President of the Council of the European Union and one member from the European Commission, may participate in the meetings of the General Council without the right to vote. The meetings usually take place once every three months in Frankfurt. The General Council is not responsible for the euro area monetary policy decisions. It performs the tasks taken over from the European Monetary Institute, which the ECB has to fulfil in the third phase of the EMU until all the EU Member States have adopted the euro. Thus, the key obligations of the General Council are the following:

-  Compilation of Convergence Reports on the progress of non-euro area EU Member States;
-  Provision of guidance in preparing for the adoption of the euro;
-  Participation in the advisory functions of the ESCB and assistance in the collection of statistical data.

EUROPEAN CENTRAL BANK