ECB Press conference: Introductory statement

Willem F. Duisenberg, President of the European Central Bank, 9 June 1998

Ladies and gentlemen, I am here today to report on the outcome of the first meetings of the three decision-making bodies of the ECB: the General Council; the Governing Council; and, the Executive Board; all of which, in accordance with the ESCB/ECB Statute, are chaired by me, as President of the ECB, or, in my absence, by the Vice-President, who is sitting next to me.

I may recall that the Heads of State or Government appointed six members to the Executive Board of the ECB, including the President and the Vice-President, as from 1 June 1998, which thus constitutes the date of establishment not only of the ECB but also of the ESCB. I may also recall that on 4 June 1998 the Executive Board released a press statement announcing its 2 June 1998 decision on the distribution of responsibilities among its members for the business areas of the ECB.

In subsequent meetings of the Executive Board the first meetings of the Governing and the General Councils were prepared. The first meetings of both bodies were held earlier today.

Further information about the members of the decision-making bodies of the ECB, about the constitution of the ESCB, about its objectives and tasks, and about its organisation has been made available in a press folder and can also be found on the ECB’s Web site [section About the ECB].

The General Council, which includes all fifteen EU national central bank governors, provisionally adopted its own Rules of Procedure. They will be formally approved at the next meeting of the General Council.

In accordance with Article 47 of the ESCB/ECB Statute, the General Council also made a contribution to the decision-making of the Governing Council. For this reason the General Council met before the Governing Council.

The contribution consisted in delivering opinions on two important institutional matters: (i) the key for the subscription of the capital of the ECB;

(ii) the Conditions of Employment of ECB staff. At the end of its meeting, the General Council agreed, for the remainder of this year, to meet on 1 September 1998 and on 1 December 1998.

Following the meeting of the General Council, the Governing Council met for the first time in its composition of the six members of the Executive Board and the governors of the eleven national central banks of the euro area. Mr. de Silguy participated in the meeting as a member of the European Commission; the President of the EU Council, who also has a right to attend, did not participate.

The Governing Council: (i) took note of the Rules of Procedure of the European Central Bank, as proposed by the Executive Board, and will revert to them at its next meeting;

(ii) it adopted three Decisions: - the first Decision relates to the method to be applied for determining the national central banks’ percentage shares in the key for the ECB’s capital. Application of this method has resulted in shares for the fifteen EU national central banks being determined with a level of precision of four decimal places; I will not read out the details, however, this information is being made available.

- the second Decision relates to the measures necessary for the paying up of the capital of the ECB. It has been decided that the eleven national central banks of the euro area will pay up in full their respective subscriptions to the ECB’s capital according to the key established in the preceding Decision and that they will do so by 1 July 1998. As a result, the ECB will be endowed with an initial capital of slightly under EUR 4 billion;

- the third Decision consists in recommending to the Council of the European Union the first external auditor of the European Central Bank.

These and future Decisions will obviously be published in the Official Journal of the European Communities for general notice. The Governing Council also decided on a number of organisational matters: (i) it laid down the Conditions of Employment of the staff of the European Central Bank;

(ii) it provisionally agreed on a budget for the European Central Bank for the second half of 1998, which will be formally adopted at the next meeting;

(iii) it agreed on the framework for the organisation of the overall testing of ESCB-wide systems and procedures which will be conducted in the second half of this year, so as to ensure that the ESCB is in a position to undertake its tasks as from 1 January 1999.

Furthermore, the Governing Council decided on two specific issues relating to the preparation of Stage Three: (i) with respect to the TARGET system, a pricing policy was agreed, the main element of which is the degressive tariff that will be applied to payment transactions flowing through this system. A separate press release, which will be made available in all Community languages, will provide further details on this matter;

(ii) with respect to the euro banknotes, a largely decentralised approach for the initial supply of such banknotes has been agreed upon. This means that each of the eleven national central banks of the euro area will be free to organise the industrial process for the production of the euro banknotes needed to replace their national banknotes. In other words, each national central bank may produce all of the relevant euro banknotes itself or, alternatively, it may enter into bilateral pooling arrangements.

In addition, the Governing Council was consulted by the Executive Board on the organisational structure of the ECB. The Governing Council took note of, and agreed with, this structure, information about which is being made available. The Governing Council also agreed with the proposals of the Executive Board as regards the appointment of ECB Managers. I should like to point out that, of the fifty-five managerial positions in the ECB, forty-nine will be recruited from the current EMI staff.

Finally, the Governing Council decided, for the remainder of this year, to meet in any event on the first Tuesday of every month, with the exception of the month of August. Thus the next meeting of the Governing Council is scheduled for 7 July 1998. Before that date, more precisely on 30 June 1998, there will be a ceremony to be held in the Alte Oper in Frankfurt to mark the establishment of the ESCB.

For the remainder of this year the Governing Council will have to decide on all elements of the so-called regulatory, organisational and logistical framework necessary for the ESCB to perform its tasks in Stage Three, which the EMI has prepared in accordance with the Treaty. To this end, the Executive Board is currently preparing a work programme, which will cover, inter alia, such items as:

(i) the decision on whether or not to introduce a minimum reserve system and the specification of its features;

(ii) the monetary policy strategy;

(iii) the procedural rules for the administration of ERM2;

(iv) the transfer of foreign reserve assets to the ECB;

(v) the provision of intraday liquidity to non-euro area national central banks of the EU in the TARGET system;

(vi) the technical specification for the euro banknotes;

(vii) the scope and format of the financial reporting of the ESCB;

(viii) the allocation of the ESCB’s monetary income.

You will understand that, after nine days of ECB existence, I am not yet in a position to give you further details on the precise timing of the decision-making on the above and many other items to be addressed by the Governing Council.