The European Central Bank (ECB) was established on June 1, 1998, following the establishment of the European Monetary Union. The new currency, euro, came into existence on 1 January 1999, and it began to circulate on January 1, 2002.Countries that use the euro form the Eurosystem or the Eurozone.All EU members constitute the European System of Central Banks (ESCB).

The Bank establishes and executes the monetary policies of the EU, directs the foreign exchange operations, and ensures the smooth functioning of the payments system.Headquartered in Frankfurt, the Bank also distributes euros to its member countries and protects it.The Bank’s duties also comprise ensuring price stability in member countries and setting the interest rates.

The governments of the member states cannot interfere with or influence the Bank, a wholly independent central bank.However, the Bank works in close association with the governments and central banks of the EU member states.