The General Council has been instituted as a third decision-making body of the ECB for as long as there are member states which have not yet adopted the euro (see Article 44 of the Statute of the ESCB/ECB).
The functioning of these bodies is governed by the EC Treaty, the Statute of the ESCB/ECB and their Rules of Procedure.
Decision-making within the Eurosystem and the ESCB is centralized. The ECB and the euro-area NCBs BOTH contribute, strategically and operationally, to achieving the common goals of the Eurosystem following the principle of decentralization, as laid down in the Statute of the ESCB/ECB.
The Governing Council
The Governing Council comprises the members of the Executive Board of the ECB and the governors of the NCBs of the Member States which have adopted the euro.
According to the Treaty, its main responsibilities are:
- to take the decisions and adopt the guidelines necessary to ensure the performance of the tasks entrusted to the Eurosystem,
- to formulate the monetary policy of the euro area, including, as appropriate, decisions relating to monetary objectives, key interest rates and the supply of reserves in the Eurosystem, as well as to establish the guidelines for their implementation, and
- in the context of the ECB's new responsibilities related to banking supervision, to adopt decisions relating to the general framework under which supervisory decisions are taken, and to adopt the complete draft decisions proposed by the Supervisory Board under the non-objection procedure.
The meetings of the Governing Council take place, as a rule, twice a month at the ECB's premises in Frankfurt am Main.
The Governing Council assesses economic and monetary developments and takes its monetary policy decisions every six weeks. At the other meetings, the Council discusses mainly issues related to other tasks and responsibilities of the ECB and the Eurosystem. To ensure the separation of the ECB's monetary policy and other tasks from its supervisory responsibilities, separate meetings of the Governing Council are held.
When taking decisions, the members of the Governing Council act in a fully independent personal capacity. This is reflected by the 'one member, one vote' principle.
The Lithuania's adoption of the euro as of 1st January, 2015 triggered the implementation of rotating voting rights in the Governing Council, in which National Central Bank Governors take turns as voting members.
For the rotation of voting rights, Governors have been placed in two groups in accordance with a ranking based on a composite indicator of the economic and financial weights of their respective countries. The groups will be three when the number of governors exceeds 21. The Governors from countries ranked first to fifth - currently, Germany, France, Italy, Spain and the Netherlands - share four voting rights. All others (14 since Lithuania joined on 1 January 2015) share 11 voting rights.
The rotation is set at one month, that is, Governors take turns using the rights on a monthly basis. All Governors will continue to participate in the Governing Council meetings and discussions. The principle of 'one member, one vote' applies to those holding a voting right at that time.
The monetary policy decision is explained in detail at a press conference held every six weeks. The President, assisted by the Vice-President, chairs the press conference.
The accounts of Governing Council monetary policy discussions will be released four weeks after each meeting, starting with the meeting on 22 January 2015.
A Code of Conduct adopted by the ECB provides the members of the Governing Council with ethical guidelines and principles designed to safeguard the integrity and reputation of the Eurosystem and to ensure the continued effectiveness of its operations.
The Executive Board
The Executive Board comprises the President and the Vice-President of the ECB and four other members appointed by the Heads of State or Government of the member states that have adopted the euro.
The main responsibilities of the Executive Board, which usually meets once a week, are:
- to prepare the meetings of the Governing Council,
- to implement the monetary policy of the euro area in accordance with the guidelines and decisions adopted by the Governing Council, giving the necessary instructions to the euro area NCBs,
- to manage the day-to-day business of the ECB, and
- to exercise certain powers delegated to it by the Governing Council, including those of a regulatory nature.
The Executive Board members each have one vote. As a rule, the Board acts by a simple majority of the votes cast, and the President has the casting vote in the event of a tie (see Article 11 of the Statute of the ESCB/ECB).
The Executive Board members adhere to the Code of Conduct of the ECB (which gives guidance to and sets benchmarks for all members of staff of the ECB, as well as the members of the Executive Board, all of whom are expected to maintain high professional and ethical standards). They also follow a Supplementary Code of Ethical Criteria, containing further standards applicable to the members of the Executive Board.
The General Council
The General Council is composed of the President and the Vice-President of the ECB and the governors of the NCBs of all EU Member States.
It carries out the tasks taken over from the European Monetary Institute that still have to be performed by the ECB because not all of the member states have adopted the euro. In particular, it provides advice and coordinates policies to support the convergence of the non-euro-area EU countries.
The General Council usually meets every three months. As a rule, it takes decisions by simple majority.
The Supervisory Board meets every three weeks to discuss, plan and carry out the ECB's supervisory tasks. It proposes draft decisions to the Governing Council under the non-objection procedure.
Mission of the Eurosystem
In January 2005, the ECB and the euro-area NCBs published on their websites a document outlining the mission of the Eurosystem, together with the strategic aims and the organizational principles followed in carrying out the functions and objectives assigned to the Eurosystem by the Treaty and the Statute of the ESCB/ECB.
The Eurosystem mission statement is based on the experience gained within a common central banking system for the euro area, as well as on the specific expertise and indispensable contributions of all the Eurosystem central banks.
It states what the Eurosystem central banks aim to achieve together, and the way they interact and cooperate on the basis of shared values.