Institutional framework of monetary policy

In 1992 the countries of the European Economic Community concluded the Maastricht Treaty that established the completion of an Economic and Monetary Union (EMU) as a formal objective and set a number of convergence criteria. The monetary policy of the EMU is conducted by the Eurosystem, which is made up of the ECB and the NCBs of the EU Member States whose currency is the euro.

Following the Maastricht Treaty, on 1 January 1999 the central banks of the 15 European Union Member States and the newly created European Central Bank (ECB) became members of a supranational institution: the European System of Central Banks (ESCB).

Monetary union was launched without Greece, which joined on 1 January 2001, and without Britain, Denmark and Sweden. As long as not all Member States of the European Union also belong to the Monetary Union, a distinction will be made between the Eurosystem and the ESCB.

  • Eurosystem: ECB + central banks of the countries in the euro area 
  • ESCB: ECB + central banks of the 28 EU countries