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The European Central Bank (ECB) (: '''Europäische Zentralbank''') The ECB is one of the world's largest Central Bank s, being in charge of Monetary Policy for the European Union 's official currency, the Euro , which is - to date - used by over 300 million Europeans in 12 EU countries. The ECB was established on June 1 , 1998 . The headquarters are located in Frankfurt Am Main , Germany . STRUCTURE & ORGANISATION The organisation of the ECB is modelled on that of the German Bundesbank and Landesbank en. 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 local central banks within the ESCB. Tasks The major task of the ECB is to maintain a Monetary policy . Currently the primary objective of the ECB’s monetary policy is to maintain price stability. The ECB aims at inflation rates of below, but close to, 2% over the medium term. (as quoted from the ECB website). European System of Central Banks The European System Of Central Banks (ESCB) is comprised of the European Central Bank (ECB), and the local Central Bank s of the 25 member-states of the European Union . Only governors from national banks inside the eurozone take part and are responsible for the decision process. Executive Board of Directors The Executive Board consists of six members which are elaborating the strategies for the bank's policy. Four of these six seats are reserved for the Eurozone's four big central banks of France, Germany, Italy and Spain. President of the European Central Bank See Also: List of Presidents of the European Central Bank In 1999 Wim Duisenberg , the former president of De Nederlandsche Bank , and former finance minister of the Netherlands became the first president of the ECB. In November 2003 Jean-Claude Trichet followed and is still president today. GOALS AND INSTRUMENTS The ECB hold reserves of over € 4.0 billion of which just over 30% are gold reserves of the Bundesbank and ca 20% from the Banque De France . ECONOMIC CULTURE sculpture.]] There are two main lines of criticism within the ECB. Independence Critics focus on the independence of the institution. The ECB was established as a Central Bank designed to operate independently of political intervention. Its objectives and powers were politically established, but the decisions as to how those powers should best be used to achieve the objectives was left in the hands of the ECB itself. However, as many national banks in the EU are outside the eurozone and independent (the Danmarks Nationalbank or the Bank Of England for instance), this argument could also apply to them. Some see this independence as undemocratic and therefore criticise the decision making process and objectives of the ECB, asserting 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 Violation s or the natural Environment . The ECB does not publish or invite comments on its proposed decisions. After publication of its actions and decisions, ECB web pages do not solicit direct comments by citizens. It is thought that details of internal meetings are not made public in order not to reveal internal splits in the board of governors. 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. Still, the ECB is accountable to the European Parliament and the council of ministers. It appoints the ECB president and vice-president and other members of the ECB's executive board. The nominees must be approved by Parliament first, and then by the council of ministers before they can assume their roles in the institution. Also, it is required by law for the ECB president to present an annual report to the plenary sitting of Parliament. Furthermore, the ECB president and other members of the executive board are present in the Parliament's monetary affairs committee who meet regularly. These meetings take place four times a year, but can be more frequent if any side would want to. It is important to add that it is generally accepted by economists that the independence of the Central Bank is the best way to avoid selfish manipulation of the macroeconomy for political purposes. Inflation targets Some critics feel that the objectives given to the ECB are inappropriate. The ECB sets interest rates in order to control inflation, but does not take into account objectives such as employment and Exchange Rate stability. Some feel this as a too narrow set of objectives, leading to decisions on interest rate that are inappropriate given the wider needs of the economy. Many British economists have stated that the ECB should adopt a symmetrical target rate, much like the one that the Bank Of England follows. The unusually low interest rates set by the ECB have been criticized as being inappropriate for regions of Europe with property bubbles. These low interest rates are a factor of the Irish Property Bubble . Although it must be said that it has an economic reason, to avoid Recession in many important countries of the eurozone ( France , Germany and Italy mainly) that would slow the growth of the rest of the European countries. TRIVIA The current ECB building in Downtown Frankfurt is only its temporary home. The ECB ran a large international architecture competition in 1999 for a new tower in Frankfurt, Eastend. At present the winning design scheme of Vienna based architects Coop Himmelbau is under construction. ( Winning design by Coop Himmelb(l)au for the ECB's new headquarters in Frankfurt/Main ) On January 5 , 2003 , a man stole a small Motor Glider and flew it over downtown Frankfurt, circling Skyscraper s and threatening to crash into the ECB. He landed safely after about two hours and was arrested. The man, a 31-year-old mentally disturbed German student named Franz Strambach , told a television station he wanted to call attention to Judith Resnik , a U.S. Astronaut killed in the 1986 Explosion of the Space Shuttle '' Challenger ''. SEE ALSO EXTERNAL LINKS
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