98-600: The European System of Central Banks ( ESCB ) is an institution that comprises the European Central Bank (ECB) and the national central banks (NCBs) of all 27 member states of the European Union (EU). Its objective is to ensure price stability throughout the EU, and improve monetary and financial cooperation between eurozone and non-eurozone member states of the EU. The process of decision-making in
196-594: A "Securities Market Programme" (SMP) which involved the discretionary purchase of sovereign bonds in secondary markets. Extraordinarily, the decision was taken by the Governing Council during a teleconference call only three days after the ECB's usual meeting of 6 May (when Trichet still denied the possibility of purchasing sovereign bonds). The ECB justified this decision by the necessity to "address severe tensions in financial markets." The decision also coincided with
294-522: A change of communication style, in particular in her use of social media to promote gender equality, and by opening dialogue with civil society stakeholders. The onset of the COVID-19 pandemic has precipitated an unprecedented crisis, profoundly impacting global public health, economies, and societal structures on an unparalleled scale. The COVID-19 crisis stands in contrast to the 2007-2008 Global Financial Crisis as it represents an exogenous shock to
392-457: A contagion of the Greek crisis towards other Eurozone countries. The assumption—largely justified—was that speculative activity would decrease over time and the value of the assets increase. Although SMP purchases did inject liquidity into financial markets, all of these injections were "sterilized" through weekly liquidity absorption. So the operation was net neutral in liquidity terms (though this
490-416: A different size to the €100 and €200 notes from the 1st series. Both denominations are now the same height (77 mm) as the €50 banknote, which makes them more comfortable to use. Their length remains unchanged. The design for the 50, 100 and 200 euro notes features the acronyms of the name of the European Central Bank in ten linguistic variants, covering all official languages of the European Union , in
588-418: A distinctive colour and size, and displays examples of a historical European architectural style : windows or gateways on the obverse , and bridges on the reverse. The architectural examples featured are stylised illustrations of the corresponding style, rather than representations of existing structures. The following table depicts the design characteristics of the 1st series (ES1) of euro notes. All
686-605: A generic rendition of Classical architecture , the 10 euro note of Romanesque architecture , the 20 euro note of Gothic architecture , the 50 euro note of the Renaissance , the 100 euro note of Baroque and Rococo , the 200 euro note of Art Nouveau and the 500 euro note of modern architecture . The initial designs by Robert Kalina were of actual bridges, including the Rialto Bridge in Venice and
784-556: A goal of the European Union (EU) and its predecessors since the 1960s. The Maastricht Treaty entered into force in 1993 with the goal of creating economic and monetary union by 1999 for all EU states except the UK and Denmark (though Denmark has a policy of a fixed exchange rate with the euro). Though the currency was born virtually in 1999, notes and coins did not begin to circulate until 2002. The euro rapidly took over from
882-469: A level otherwise none of us is willing to accept,[...].", as economists feared that the strong economies would come out of the crisis stronger while weak economies would deteriorate because of the crisis. The PEPP is thus a tool used by the ECB to purchase both private and public securities according to the specific needs of EU-countries caused by the COVID-19-crisis. The temporal flexibility from
980-530: A press conference a set of policy measures to support the European economy in the rising wake of the pandemic, saying that "all the flexibilities that are embedded in the framework of the asset purchase programme [...]" but at the same time she stated that the ECB "[...] is not here to close spreads." This left markets disappointed and let to a particular widening yield spreads in Spain, Italy and Greece. However,
1078-492: A self-fulfilling panic on financial markets: the more Greek bonds yields rose, the more likely a default became possible, the more bond yields increased in turn. This panic was also aggravated because of the reluctance of the ECB to react and intervene on sovereign bond markets for two reasons. First, because the ECB's legal framework normally forbids the purchase of sovereign bonds in the primary market (Article 123. TFEU), An over-interpretation of this limitation, inhibited
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#17327659256801176-481: A sovereign bond below that threshold, many banks would suddenly become illiquid because they would lose access to ECB refinancing operations. According to former member of the governing council of the ECB Athanasios Orphanides , this change in the ECB's collateral framework "planted the seed" of the euro crisis. Faced with those regulatory constraints, the ECB led by Jean-Claude Trichet in 2010
1274-569: A substantial part of the ECB profits would never be refunded to Greece. The ECB played a controversial role in the " Troika " by rejecting most forms of debt restructuring of public and bank debts, and pressing governments to adopt bailout programmes and structural reforms through secret letters to Italian, Spanish, Greek and Irish governments. It has further been accused of interfering in the Greek referendum of July 2015 by constraining liquidity to Greek commercial banks. In November 2010, reflecting
1372-621: A variety of color schemes. The euro notes contain many complex security features such as watermarks , invisible ink characteristics, holograms, optically variable inks and microprinting that document their authenticity. While euro coins have a national side indicating the country of issue (although not necessarily of minting), euro notes lack this. Instead, this information is shown by the first character of each note's serial number. According to European Central Bank estimates, in July 2023, there were about 29.624 billion banknotes in circulation around
1470-625: Is an asset purchase programme initiated by the ECB to counter the detrimental effects to the Euro Area economy caused by the COVID-19 crisis. To counter the COVID-19 crisis the ECB has established the Pandemic Emergency Purchase Programme (PEPP), in which the ECB is able to purchase securities from the private and public sector in a flexible manner, with the purpose to prevent sovereign debt spreads to reach
1568-651: Is prohibited by the EU Treaty. The Financial Times Deutschland referred to this episode as "the end of the ECB as we know it", referring to its hitherto perceived "hawkish" stance on inflation and its historical Deutsche Bundesbank influence. As of 18 June 2012, the ECB in total had spent €212.1bn (equal to 2.2% of the Eurozone GDP) for bond purchases covering outright debt, as part of the Securities Markets Programme. Controversially,
1666-656: Is the central component of the Eurosystem and the European System of Central Banks (ESCB) as well as one of seven institutions of the European Union . It is one of the world's most important central banks with a balance sheet total of around 7 trillion. The ECB Governing Council makes monetary policy for the Eurozone and the European Union , administers the foreign exchange reserves of EU member states, engages in foreign exchange operations, and defines
1764-534: Is the eurozone's riskiest issuer. Non-financial commercial paper with a remaining maturity of at least 28 days was also eligible for purchase under the PEPP. The maturity criteria for public sector ranges form 70 days up to 30 years and 364 days. As the PEPP can deviate from the capital key strategy, there is also no hard limit on the 33% of a single security per issuer or 33% of a member state's total outstanding security. On 12 March 2020, Christine Lagarde announced in
1862-407: Is thought that the euro notes have at least eleven different security features, which are: (looked at from the reverse, a dark bar is 1, a bright bar 0) The European Central Bank intends to redesign the notes every seven or eight years. A new series, called the "Europa series", was released from 2013; the first notes entered circulation on 2 May 2013. The new series includes slight changes, notably
1960-585: The EU in 2002 (the time of the banknote introduction), and now 19 out of 24 official languages of the EU27 , in the following order: The order is determined by the EU country listing order, with BCE ahead of ECB because of the national precedence of Belgium's two main languages, followed by the remaining languages of Germany and Austria ( Deutschland , Österreich ), Greece ( Ελλάδα , Elláda ) and Finland ( Suomi ), in that order. The initial designs for
2058-762: The Eurosystem is centralized through the decision-making bodies of the ECB, namely the Governing Council and the Executive Board . As long as there are EU member states which have not adopted the euro , a third decision-making body, the General Council, shall also exist. The NCBs of the member states that do not participate in the eurozone are members of the ESCB with a special status – while they are allowed to conduct their respective national monetary policies, they do not take part in
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#17327659256802156-517: The Greek government-debt crisis , Greek debt is given a waiver under the PEPP so that it could be purchased by the ECB under this programme. This waiver was given based on several considerations from the ECB: there was a need to alleviate the pressures stemming from the pandemic on the Greek financial markets; Greece was already and would be closely monitored by giving the waiver; and Greece regained market access. This proved to be controversial, as Greece
2254-612: The International Monetary Fund in July 2019 and formally took over the ECB's presidency on 1 November 2019. Lagarde immediately signalled a change of style in the ECB's leadership. She embarked the ECB on a strategic review of the ECB's monetary policy strategy, an exercise the ECB had not done for 17 years. As part of this exercise, Lagarde committed the ECB to look into how monetary policy could contribute to address climate change , and promised that "no stone would be left unturned." The ECB president also adopted
2352-853: The Pont de Neuilly in Paris, and were subsequently rendered more generic. In 2011, Dutch artist Robin Stam and the town of Spijkenisse in the Netherlands built seven bridges of colored concrete after the designs on the seven euro banknotes. The euro banknotes bear the signature of the President of the European Central Bank. Wim Duisenberg was the first ECB president when the first euro banknotes and coins were issued until 2003. Notes printed between November 2003 and March 2012 show
2450-828: The TARGET2 payments system. The ECB was established by the Treaty of Amsterdam in May 1999 with the purpose of guaranteeing and maintaining price stability . On 1 December 2009, the Treaty of Lisbon became effective and the bank gained the official status of an EU institution . When the ECB was created, it covered a Eurozone of eleven members. Since then, Greece joined in January 2001, Slovenia in January 2007, Cyprus and Malta in January 2008, Slovakia in January 2009, Estonia in January 2011, Latvia in January 2014, Lithuania in January 2015 and Croatia in January 2023. The current President of
2548-473: The WHO declared Europe the centre of the pandemic. By March 17, a week after the press conference given by Ms. Lagarde, stock index plateaued while the interest rate spread kept on rising over 2.8%. Euro banknotes Banknotes of the euro , the common currency of the eurozone (euro area members), have been in circulation since the first series (also called ES1 ) was issued in 2002. They are issued by
2646-412: The 1996 design contest), was chosen by the European Central Bank to redesign the euro notes. In December 2021, the ECB announced plans to redesign euro banknotes by 2024. A theme advisory group, made up of one member from each euro area country, was selected to submit theme proposals to the ECB. The proposals will be voted on by the public; a design competition will also be held. In 2023, the ECB asked
2744-611: The APP. The flexibility to deviate from the capital key is key for the PEPP: because of the uncertainty caused by COVID-19 it was needed to prevent tightening financial conditions. They prevent yield spreads between the bonds of different member states, caused by the flight-to-safety of investors. The flexibility in asset purchases allows for fluctuations in the distribution of purchases across asset classes and among jurisdictions to prevent market fragmentation. Following this strategy,
2842-544: The ECB is Christine Lagarde . Seated in Frankfurt, Germany, the bank formerly occupied the Eurotower prior to the construction of its new seat. The ECB is directly governed by European Union law . Its capital stock, worth €11 billion, is owned by all 27 central banks of the EU member states as shareholders . The initial capital allocation key was determined in 1998 on the basis of the states' population and GDP, but
2940-633: The ECB President Jean-Claude Trichet sent two secret letters to the Irish finance Minister which essentially informed the Irish government of the possible suspension of ELA's credit lines, unless the government requested a financial assistance programme to the Eurogroup under the condition of further reforms and fiscal consolidation. In addition, the ECB insisted that no debt restructuring (or bail-in ) should be applied to
3038-446: The ECB announced an extension of those programmes within a full-fledge " quantitative easing " programme which also included sovereign bonds, to the tune of 60 billion euros per month up until at least September 2016. The programme was started on 9 March 2015. On 8 June 2016, the ECB added corporate bonds to its asset purchases portfolio with the launch of the corporate sector purchase programme (CSPP). Under this programme, it conducted
European System of Central Banks - Misplaced Pages Continue
3136-468: The ECB announced that the new theme for future banknotes had been narrowed down to either "European culture" or "rivers and birds". The European Central Bank closely monitors the circulation and stock of euro coins and banknotes. It is a task of the Eurosystem to ensure an efficient and smooth supply of euro notes and to maintain their integrity throughout the eurozone . As of July 2023, there were about 29,624 million banknotes in circulation around
3234-678: The ECB came into existence, the French government wanted Jean-Claude Trichet , former head of the French central bank , to be the ECB's first president. The French argued that since the ECB was to be located in Germany, its president should be French. This was opposed by the German, Dutch and Belgian governments who saw Duisenberg as a guarantor of a strong euro. Tensions were abated by a gentleman's agreement in which Duisenberg would stand down before
3332-539: The ECB from implementing quantitative easing like the Federal Reserve and the Bank of England did as soon as 2008, which played an important role in stabilizing markets. Secondly, a decision by the ECB made in 2005 introduced a minimum credit rating (BBB-) for all Eurozone sovereign bonds to be eligible as collateral to the ECB's open market operations. This meant that if a private rating agencies were to downgrade
3430-460: The ECB made substantial profits out of SMP, which were largely redistributed to Eurozone countries. In 2013, the Eurogroup decided to refund those profits to Greece, however, the payments were suspended from 2014 until 2017 over the conflict between Yanis Varoufakis and ministers of the Eurogroup. In 2018, profits refunds were reinstalled by the Eurogroup. However, several NGOs complained that
3528-474: The ECB raised interest rates for the first time since 2008 from 1% to 1.25%, with a further increase to 1.50% in July 2011. However, in 2012–2013 the ECB sharply lowered interest rates to encourage economic growth, reaching the historically low 0.25% in November 2013. Soon after the rates were cut to 0.15%, then on 4 September 2014 the central bank reduced the rates by two-thirds from 0.15% to 0.05%. Recently,
3626-573: The ECB to instigate targeted long term refinancing operations (TLTROs), first in September and later in December 2014. These complementary programs imposed conditionality on the LTROs. The TLTROs provided low cost financing to participating banks, under the condition that they reached certain targets in terms of lending to firms and households. The participating banks were thus more incited to lend to
3724-544: The ECB. This change in leadership also marks the start of a new era under which the ECB will become more and more interventionist and eventually ended the Eurozone sovereign debt crisis . Draghi's presidency started with the impressive launch of a new round of 1% interest loans with a term of three years (36 months) – the Long-term Refinancing operations (LTRO) . Under this programme, 523 Banks tapped as much as €489.2 bn (US$ 640 bn). Observers were surprised by
3822-768: The ESCB makes provision for the following measures to ensure security of tenure for NCB governors and members of the Executive Board: The ESCB is composed of the European Central Bank and the national central banks of all 27 member states of the EU. The first section of the following list lists member states and their central banks that form the Eurosystem (plus the ECB), which set eurozone monetary policy. The second section lists member states and their central banks that maintain separate currencies. European Central Bank The European Central Bank ( ECB )
3920-519: The EU is depicted on it. The initial series did not include the recent members Cyprus and Malta (Cyprus was off the map to the east and Malta was too small to be depicted.) The Bulgarian Cyrillic alphabet features on the Europa series banknotes, as a result of Bulgaria joining the European Union in 2007 . Thus this series includes " ЕВРО ", which is the Bulgarian spelling for EURO, as well as
4018-556: The EU leaders decision of 10 May to establish the European Financial Stabilisation mechanism, which would serve as a crisis fighting fund to safeguard the euro area from future sovereign debt crisis. Although at first limited to the debt of Greece, Ireland and Portugal, the bulk of the ECB's bond buying eventually consisted of Spanish and Italian debt. These purchases were intended to dampen international speculation against stressed countries, and thus avoid
European System of Central Banks - Misplaced Pages Continue
4116-459: The Europa series 10 euro note was revealed on 13 January 2014 and it entered circulation on 23 September 2014. The full design of the Europa series 20 euro banknote was revealed on 24 February 2015, and it was launched on 25 November 2015. The full design of the Europa series 50 euro note was revealed on 5 July 2016 and the new 50 note was released on 4 April 2017. The full design of the Europa series 100 euro banknote and 200 euro banknote
4214-413: The Europa series, and their feedback included in the final designs. On 6 December 2021, the European Central Bank announced its intention to redesign the banknotes. ECB President Christine Lagarde stated in a press release that it was time to "review the look of [the] banknotes and make them more relatable to the public". A 19-member advisory board, with one member from each eurozone member state,
4312-477: The Eurozone's financial institutions. Further, these operations were devoid of monitoring from the ECB regarding the use made of these liquidities and it appeared that banks had significantly used these funds to pursue carry-trade strategies, purchasing sovereign bonds with higher rates and corresponding maturity to generate profits, instead of increasing private lending. These critics and deficiencies brought
4410-466: The Governing Council announced firstly to provide immediate liquidity through conducting additional LTROs; secondly, to provide more favorable terms on the TLTRO III operations outstanding in the period between June 2020 and June 2021; and thirdly, to announce an additional package of net asset purchases of €120 billion by the end of 2020 under the already existing APP. A day later, on 13 March 2020,
4508-941: The Governing Council of the ECB (i.e., the Council of the European Monetary Institute (EMI) for the first appointments). The main responsibilities of the executive board are: The General Council comprises the President and the Vice-President and the governors of the NCBs of all 27 member states. The General Council performs the tasks which the ECB took over from the EMI and which, owing to the derogation of one or more member states, still have to be performed in Stage Three of Economic and Monetary Union (EMU). The General Council also contributes to: The Statute of
4606-458: The PEPP distributed the money among countries in need. The APP follows the capital key strategy, from which no deviations are possible. This makes the APP not able to counter the crisis effectively. Margrethe Vestager , European Commissioner for Competition argued "We will need to distribute in order to recover together. These increasing asymmetries will otherwise fragment the single market to
4704-577: The President, the Vice-President and four other members, all chosen from among persons of recognized standing and professional experience in monetary or banking matters. They are appointed by common accord of the governments of the member states at the level of the Heads of State or Government, on a recommendation from the Council of Ministers after it has consulted the European Parliament and
4802-633: The abbreviation " ЕЦБ " (short for Европейска централна банка in Bulgarian ), while set to join the eurozone and abandon Bulgarian lev in 2024. The new banknotes also feature the Maltese abbreviation BĊE ( Bank Ċentrali Ewropew ), the Hungarian abbreviation EKB ( Európai Központi Bank ) and the Polish abbreviation EBC ( Europejski Bank Centralny ). The modified 5 euro note features
4900-438: The accession of Estonia ( Eesti ); and the languages of Croatia ( Hrvatska ), Hungary ( Magyarország ), Malta and Poland ( Polska ) trail the list. The notes of the Europa series do not show the same year. The year shown is the year the note is issued. The Europa series euro banknotes are supposedly more durable than the first series banknotes. Reinhold Gerstetter , an independent banknote designer (and one of participants of
4998-527: The adherence by the benefitting country to an adjustment programme to the ESM. The program was adopted with near unanimity, the Bundesbank president Jens Weidmann being the sole member of the ECB's Governing Council to vote against it. Even if OMT was never actually implemented until today, it made the "Whatever it takes" pledge credible and significantly contributed to stabilizing financial markets and ending
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#17327659256805096-530: The average life of a euro banknote is about three years before replacement due to wear, but with a wide variation by denomination level, from less than a year for €5 banknotes to over 30 years for €500 banknotes, on average. High denomination banknotes (€100, €200, €500) typically last longer as they are less frequently used. The Europa series lower denomination €5 and €10 banknotes are designed to last longer, thanks to additional coating. The euro came into existence on 1 January 1999. The euro's creation had been
5194-584: The banknotes were chosen from 44 proposals in a design competition, launched by the Council of the European Monetary Institute (EMI) on 12 February 1996. The winning entry, created by Robert Kalina from the Oesterreichische Nationalbank , was selected on 3 December 1996. The euro banknotes were made of pure cotton fibre, which improves their durability as well as giving the banknotes a distinctive feel. In
5292-400: The capital key has been readjusted since. Shares in the ECB are not transferable and cannot be used as collateral. The European Central Bank is the de facto successor of the European Monetary Institute (EMI). The EMI was established at the start of the second stage of the EU's Economic and Monetary Union (EMU) to handle the transitional issues of states adopting the euro and prepare for
5390-463: The capital key meant that the ECB could especially prevent the rise of Italian and Spanish yield spreads. Assets meeting the eligibility criteria of the APP were also eligible under the PEPP. However, the PEPP complemented the APP eligibility framework given the specificity of the PEPP-context of crisis requiring a more tailored response. Among the distinctions is that for the first time since
5488-510: The capital key strategy followed by the APP. Second, the PEPP-envelope does not need to be used in full. The PEPP is established as a separate purchase programme from and in addition to the APP with the sole purpose to respond to the economic and financial consequences of the COVID-19 crisis. Following Philip R. Lane , chief economist of the ECB, the PEPP plays a dual role in the COVID-19 crisis: (i) ensuring price stability and at
5586-429: The creation of the ECB and European System of Central Banks (ESCB). The EMI itself took over from the earlier European Monetary Cooperation Fund (EMCF). The ECB formally replaced the EMI on 1 June 1998 by virtue of the Treaty on European Union (TEU, Treaty of Maastricht), however it did not exercise its full powers until the introduction of the euro on 1 January 1999, signalling the third stage of EMU. The bank
5684-412: The decision-making with regard to the single monetary policy for the eurozone and the implementation of such decisions. The Governing Council comprises all the members of the executive board and the governors of the NCBs of the member states without a derogation , that is, those countries which have adopted the euro. The main responsibilities of the Governing Council are: The executive board comprises
5782-449: The end of his mandate, to be replaced by Trichet. Trichet replaced Duisenberg as president in November 2003. Until 2007, the ECB had very successfully managed to maintain inflation close but below 2%. The European Central Bank underwent through a deep internal transformation as it faced the global financial crisis and the Eurozone debt crisis . The so-called European debt crisis began after Greece's new elected government uncovered
5880-486: The euro notes that allow the general public to recognise the authenticity of their currency at a glance: However, in the interest of advanced security of the euro notes, the full list of these features is a closely guarded secret of the European Central Bank and the National Central Banks of the Eurosystem. Still, between the official descriptions and independent discoveries made by observant users, it
5978-451: The eurozone in 2008. The map did not stretch as far east as Cyprus, while Malta was too small to be depicted. Both Cyprus and Malta are however depicted on the Europa series note. The following table depicts the design characteristics of the second series of euro banknotes (ES2), also known as the Europa series, after the holographic depiction of the mythological Europa common to these banknotes. The Europa series banknotes, similarly to
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#17327659256806076-421: The eurozone, with a total value of about €1.569 trillion. On 8 November 2012, the ECB announced that the first series of notes would be replaced by the Europa series (also called ES2 ), starting with the 5 euro note on 2 May 2013. This series does not have a €500 note , as the ECB have decided to permanently cease its production over concerns that it could facilitate illicit activities. Estimates suggest that
6174-517: The fear that after the COVID-19 crisis was over, the stronger economies would emerge even stronger, while the weak economies would get even weaker. Thanks to the more stringent banking regulations implemented after the Global Financial Crisis, a financial crisis was avoided as banks could cope better with the crisis and complementary measures were taken by the EU and national governments. The Pandemic Asset Purchase Programme (PEPP)
6272-514: The first and Europa series, the Azores , French Guiana, Guadeloupe , Madeira , alba, Réunion , and the Canary Islands , overseas territories of the eurozone member states, which also use the euro, were shown under the map in separate boxes. Cyprus and Malta were not shown on the first series because they were not in the EU in 2002, when the banknotes were issued, even though they joined
6370-406: The first series banknotes in the 1990s. As a result, the design of the first euro banknotes include several characteristics which help both the blind and partially sighted to use the notes with greater confidence. Features for blind and visually impaired users include: As in the design process of the first series of euro notes, visually impaired users were consulted during the design phase of
6468-585: The first series, bear the European flag , a map of the continent on the reverse and the signature of Mario Draghi , since 1 November 2011 president of the ECB . The 12 stars from the flag are also incorporated into the notes. On 4 May 2016 the European Central Bank decided not to issue a 500 euro banknote for the Europa series. The series also bears the name of the currency in capital letters, but in three scripts: Latin (EURO), Greek ( ΕΥΡΩ ), and Cyrillic ( ЕВРО ). The 2nd series €100 and €200 notes are
6566-528: The first three months of 2012. Facing renewed fears about sovereigns in the eurozone continued Mario Draghi made a decisive speech in London, by declaring that the ECB "...is ready to do whatever it takes to preserve the Euro. And believe me, it will be enough." In light of slow political progress on solving the eurozone crisis, Draghi's statement has been seen as a key turning point in the eurozone crisis, as it
6664-458: The following order: The 5 euro, 10 euro and 20 euro notes do not feature ESB , as Croatian became an official language only in July 2013 with the accession of Croatia , after the introduction of the banknote design earlier that year. The order in which the acronyms are shown is determined by the same principles as for Series 1: the language of Bulgaria ( България/Bulgaria ) precedes that of Germany ( Deutschland ); EKP now precedes ΕΚΤ due to
6762-500: The former national currencies and slowly expanded around the growing EU . In 2009, the Lisbon Treaty formalised the euro's political authority, the Eurogroup , alongside the European Central Bank . Slovenia joined the eurozone in 2007, Cyprus and Malta in 2008, Slovakia in 2009, Estonia in 2011, Latvia in 2014, Lithuania in 2015 and Croatia in 2023. There are seven different denominations of euro banknotes: €5, €10, €20, €50, €100, €200, and €500. Each has
6860-467: The huge increase in borrowing, including the cover the cost of having guaranteed the liabilities of banks, the cost of borrowing in the private financial markets had become prohibitive for the Irish government. Although it had deferred the cash cost of recapitalising the failing Anglo Irish Bank by nationalising it and issuing it with a "promissory note" (an IOU), the Government also faced a large deficit on its non-banking activities, and it therefore turned to
6958-427: The inclusion of the face of the mythological princess Europa in the watermark and in the hologram stripe. New production and anti-counterfeiting techniques are employed on the new notes, but the design shares the colours of the first series and the theme of bridges and arches. The new notes are nonetheless recognisable as a new series. The new notes also reflect the expansion of the European Union: every member of
7056-456: The initials of the European Central Bank in each of the contemporary EU member languages in a column on the left-hand side of the obverse. The word "euro" in Latin, Greek, and Cyrillic lettering has also been moved to a more central position. The full design of the Europa series 5 euro banknote was revealed on 10 January 2013. The new note entered circulation on 2 May 2013. The full design of
7154-663: The interest rates were further reduced reaching 0.00%, the lowest rates on record. In a report adopted on 13 March 2014, the European Parliament criticized the "potential conflict of interest between the current role of the ECB in the Troika as 'technical advisor' and its position as a creditor of the four Member States, as well as its mandate under the Treaty". The report was led by Austrian right-wing MEP Othmar Karas and French Socialist MEP Liem Hoang Ngoc . On 1 November 2011, Mario Draghi replaced Jean-Claude Trichet as President of
7252-410: The intermediate monetary objectives and key interest rate of the EU. The ECB Executive Board enforces the policies and decisions of the Governing Council, and may direct the national central banks when doing so. The ECB has the exclusive right to authorise the issuance of euro banknotes . Member states can issue euro coins , but the volume must be approved by the ECB beforehand. The bank also operates
7350-418: The national central banks of the Eurosystem or the European Central Bank . The euro was established in 1999, but "for the first three years it was an invisible currency, used for accounting purposes only, e.g. in electronic payments". In 2002, notes and coins began to circulate. The euro rapidly took over from the former national currencies and slowly expanded around the European Union . Denominations of
7448-599: The nationalized banks' bondholders, a measure which could have saved Ireland 8 billion euros. During 2012, the ECB pressed for an early end to the ELA, and this situation was resolved with the liquidation of the successor institution IBRC in February 2013. The promissory note was exchanged for much longer term marketable floating rate notes which were disposed of by the Central Bank over the following decade. In April 2011,
7546-494: The net purchase of corporate bonds until January 2019 to reach about €177 billion. While the programme was halted for 11 months in January 2019, the ECB restarted net purchases in November 2019. As of 2021, the size of the ECB's quantitative easing programme had reached 2947 billion euros. The long term refinancing operations (LTRO) are regular open market operations providing financing to credit institutions for periods up to four years. They aim at favoring lending conditions to
7644-479: The notes of the initial series of euro notes bear the European flag , a map of the continent on the reverse, the name "euro" in both Latin and Greek script (EURO / ΕΥΡΩ) and the signature of a president of the ECB , depending on when the banknote was printed. The 12 stars from the flag are also incorporated into every note. The notes also carry the acronyms of the name of the European Central Bank in five linguistic variants, covering all official languages of
7742-444: The notes range from €5 to €500 and, unlike euro coins , the design is identical across the whole of the eurozone, although they are issued and printed in various member states. The euro banknotes are pure cotton fibre, which improves their durability as well as giving the banknotes a distinctive feel. They measure from 120 by 62 millimetres (4.7 in × 2.4 in) to 160 by 82 millimetres (6.3 in × 3.2 in) and have
7840-499: The official sector for a loan to bridge the shortfall until its finances were credibly back on a sustainable footing. Meanwhile, Anglo used the promissory note as collateral for its emergency loan (ELA) from the Central Bank. This enabled Anglo was able to repay its depositors and bondholders. It became clear later that the ECB played a key role in making sure the Irish government did not let Anglo default on its debts, to avoid financial instability risks. On 15 October and 6 November 2010,
7938-476: The old notes will lose their legal tender status. However, they will not lose their value and it will be possible to exchange them for new notes at Eurosystem central banks indefinitely. "A good design for the blind and partially sighted is a good design for everybody" was the principle behind the cooperation of the European Central Bank and the European Blind Union during the design phase of
8036-436: The private sector and more generally stimulating bank lending to the real economy, thereby fostering growth. In December 2011 and January 2012, in the aftermath of the Global Financial Crisis, the ECB implemented two LTROs, injecting over €1000 billion of liquidity in the Eurozone financial system. They were later criticized for their inability to revive growth and to help truly revive the real economy, despite having stabilized
8134-416: The public to vote on a theme for the new design. Due to the great number of historic bridges, arches, and gateways throughout the European continent, all the structures represented on the notes are entirely stylized illustrations of the relevant architectural styles, designed to evoke the landmarks within the European Union , representing various European ages and styles. For example, the 5 euro note has
8232-529: The real economy, stemming from measures implemented to mitigate the public health emergency, distinct from the internal financial origins of the preceding crisis that transposed repercussions onto the real economy. Following the measures implemented by all governments to counter the spread of COVID-19 across Europe, investors fled to safety, which caused the risk of fire sales in asset markets, illiquidity spirals , credit spikes and discontinuities associated with market freezes. The flight-to-safety also encouraged
8330-492: The real economy. A third wave of TLTRO's was announced on 7 March 2019, namely the TLTRO III. Under TLTRO III, the interest rate was set at -0.5% below the deposit facility rate (DFR), under condition that banks reached a specific lending performance threshold. The TLTRO III programme was successful to stimulate credit growth. In July 2019, EU leaders nominated Christine Lagarde to replace Mario Draghi as ECB President. Lagarde resigned from her position as managing director of
8428-469: The real level indebtedness and budget deficit and warned EU institutions of the imminent danger of a Greek sovereign default . Foreseeing a possible sovereign default in the eurozone, the general public, international and European institutions, and the financial community reassessed the economic situation and creditworthiness of some Eurozone member states. Consequently, sovereign bonds yields of several Eurozone countries started to rise sharply. This provoked
8526-484: The same levels as during the European debt crisis . It is a quantitative easing unconventional monetary policy, based on the principles of the Asset Purchases Program (APP) which is a similar programme established by the ECB in mid-2014. Asset purchase programmes are intended to bring down risk premia or term premia. However, the PEPP is not entirely the same as the APP, as it can deviate from
8624-422: The same time (ii) stabilizing the market using the flexibility of the programme to prevent market fragmentation. National central banks are the main purchasers of the bonds under the principle of risk sharing: private bonds fall completely under the risk of national central banks, while only 20% of public bonds are subject to risk sharing. These purchases under the PEPP eventually follow the capital key used in
8722-424: The signature of Jean-Claude Trichet , the second President of the ECB. Banknotes printed after March 2012 bear the signature of the third ECB President Mario Draghi . From 2020, Christine Lagarde 's signature will gradually begin to appear on banknotes entering circulation, becoming the fourth signature to appear on euro banknotes. The European Central Bank has described some of the basic security features of
8820-509: The sovereign debt crisis was almost solved by 2014, the ECB started to face a repeated decline in the Eurozone inflation rate, indicating that the economy was going towards a deflation. Responding to this threat, the ECB announced on 4 September 2014 the launch of two bond buying purchases programmes: the Covered Bond Purchasing Programme (CBPP3) and Asset-Backed Securities Programme (ABSPP). On 22 January 2015,
8918-465: The sovereign debt crisis. According to various sources, the OMT programme and "whatever it takes" speeches were made possible because EU leaders previously agreed to build the banking union . In November 2014, the bank moved into its new premises , while the Eurotower building was dedicated to hosting the newly established supervisory activities of the ECB under European Banking Supervision . Although
9016-471: The volume of loans made when it was implemented. By far biggest amount of €325bn was tapped by banks in Greece, Ireland, Italy and Spain. Although those LTROs loans did not directly benefit EU governments, it effectively allowed banks to do a carry trade , by lending off the LTROs loans to governments with an interest margin. The operation also facilitated the rollover of €200bn of maturing bank debts in
9114-502: Was appointed and tasked with proposing a shortlist of themes for the new banknotes. After consultations with the public, a theme for the new notes will be chosen. A design competition for the new banknotes will follow, after which the ECB will again consult the public. Motifs will be proposed by 2024 and the final decision on the redesign is expected to be taken in 2026. Plans for the timing of introduction, and possible phaseout of older banknotes, have not been announced. On 30 November 2023,
9212-507: Was immediately welcomed by European leaders, and led to a steady decline in bond yields for eurozone countries, in particular Spain, Italy and France. Following up on Draghi's speech, on 6 September 2012 the ECB announced the Outright Monetary Transactions programme (OMT). Unlike the previous SMP programme, OMT has no ex-ante time or size limit. However, the activation of the purchases remains conditioned to
9310-423: Was of little practical importance since normal monetary policy operations were ensuring unlimited supplies of liquidity at the main policy interest rate). In September 2011, ECB's Board member Jürgen Stark , resigned in protest against the "Securities Market Programme" which involved the purchase of sovereign bonds from Southern member states, a move that he considered as equivalent to monetary financing , which
9408-412: Was reluctant to intervene to calm down financial markets. Up until 6 May 2010, Trichet formally denied at several press conferences the possibility of the ECB to embark into sovereign bonds purchases, even though Greece, Ireland, Portugal, Spain and Italy faced waves of credit rating downgrades and increasing interest rate spreads. In a remarkable u-turn, the ECB announced on 10 May 2010, the launch of
9506-522: Was revealed on 17 September 2018 and the new notes entered circulation on 28 May 2019 therefore "will complete the issuance of the Europa series." On 4 May 2016, the European Central Bank announced that a Europa series 500 euro banknote would not be released, due to fears of facilitating criminal activity. "The ECB has decided to stop producing the €500 banknote, although the first series €500 remains legal tender." The old series will gradually be withdrawn. The ECB will announce "well in advance" when
9604-513: Was the final institution needed for EMU, as outlined by the EMU reports of Pierre Werner and President Jacques Delors . It was established on 1 June 1998 The first President of the Bank was Wim Duisenberg , the former president of the Dutch central bank and the European Monetary Institute . While Duisenberg had been the head of the EMI (taking over from Alexandre Lamfalussy of Belgium) just before
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