The Legal Framework for the European System of Central Banks

The Treaty of Maastricht imposed the strict obligation to establish an economic and monetary union as an integral part of the EU. The single currency was to become the currency of the EU and the legal tender in all Member States unless an exemption was explicitly granted. Consequently, the primary law systematically only speaks of economic policy or monetary policy which is the task of the Eurosystem, consisting of the ECB and the central banks of the Member States whose currency is the euro. Although the national central banks of all the Member States together with the ECB constitute the European System of Central Banks, only the ECB is granted legal personality. General economic policy is not a task of the EU, but has been retained by the Member States. Exceptions have to be provided explicitly in the primary law. EU law, however, contains a host of rules to prevent excessive debt and deficits on the part of the Member States. Price stability has been set as the “primary objective”. The term has to be interpreted as close to zero per cent inflation. To safeguard the primary objective, a comprehensive guarantee of the independence of the ESCB, the ECB, and the members of its organs has been provided for. Exit from the Monetary Union while remaining a EU Member State is not possible. The introduction of a parallel currency is prohibited. If a new currency in substitution of the euro or parallel to it is introduced, all claims denominated in euro will remain in euro and, economically, the burden will most likely even increase.