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EUROPEAN REVIEW

ISSUE 18 - Page 11

We have another stab at explaining things European in

Plain English

• 1. social partnership
• 2. Objectives
• 3. Ombudsman
• 4. Single Currency
• 5. Commission
• 6. Agenda 2000
• 7. Council of Ministers
• 8. EUROSTAT
• 9. European Parliament
• 10. Euro-words
• 11. OSCE
• 12. European Bank for Reconstruction and Development
• 13. Court of Auditors
• 14. S.M.E.s
• 15. Leonardo and Socrates
• 16. Economic and Social Committee

17. European Central Bank

Is it a bank like those in the High Street ?

No, first of all it is not owned by shareholders, it is run by a board appointed by the Member States of the European Union. Secondly it does not manage private accounts.

What does it do then ?

Its most important task is 'to maintain price stability', in other words to stop prices going up (or down) too quickly.

How quickly ?

The target is for consumer prices to go up by less than 2% a year.

How does it make sure that this happens ?

It issues euro bank notes and so can control how many are printed.Usually the more that are printed the more inflation is. It holds the foreign exchange reserves of countries in the euro-zone and so can buy or sell euros to influence what Europe pays for goods from outside and vice versa. It can also comment on the economic policies of Member States and the European Commission if it feels that these will lead to inflationary price rises.

Who's the boss ?

At the moment the President is Wim Duisenberg who comes from the Netherlands.

Have I seen him in the media lately?

Because of the introduction of Euro notes and coins there has been some publicity about the ECB in the UK media lately.

What do they think of him ?

He has been criticised for being too conservative and not lowering interest rates fast enough to help unemployment.

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