IMPORTANCE OF EUROPEAN CENTRAL BANK MONETARY POLICY

Abstract

Support to the general economic policies, which represents one of the objectives of the European Central Bank (ECB), implies a balanced and harmonious development, employment and social protection, which would require a more active monetary policy and the use of special funds and that creates inflationary pressure and jeopardize price stability. If the price stability is guarded then there is no space to support the economic policies of the European Union (EU) and vice versa, which means that these two goals are not only in compliance, but are mutually exclusive. The functions of the European System of Central Banks (ESCB) and thus the ECB are to define and implement the monetary policy of the European Union to carry out activities related to the exchange rate, to retain and use foreign exchange reserves to ensure the good operation of the payment system on the territory of the eurozone, as well as to provide technical support to the other EU bodies. Functional economic and monetary union and a strong and stable euro are the foundation of the economic environment conducive for economic growth in Europe. The emergence of the European Monetary Union and the introduction of the euro as a common currency, is certainly the greatest achievement in the process of European integration.