In fact, it seems that the bank has been fashioned along the lines of Bundesbank.
The bank was the result of the Treaty on European Union, which is also referred to as Treaty of Maastricht. Despite the fact that the bank was established on June 1998, it started operating six months later on 1 January 1999. This was when the euro was introduced as the bank had been set up with the euro in mind.
The euro, as indicated above, came after the establishment of the European central bank. It is the official currency that has been adopted by a total of 16 members of the European Union, out of the twenty seven that are members. The states which have adopted this currency as their official currency belong to what is referred to as the Eurozone. The countries are Austria, Belgium, and Cyprus among others. There have also been cases where the currency is used by non-member countries since its inception in 2004. This is with or without formal agreements with the member states of the European Union. It is estimated that about 237 million Europeans are currently using this currency. About 175 million people have adopted euro or currencies that are pegged to this. This is especially so in Africa, where the bank has a following of over 150 million presence.
For the few years that the euro and the European central bank have been in operation, their performance can only be described as a success story. When the euro was introduced, many people had the impression that it is going to increase the rate of inflation. That maybe explains the reason why some of the states were initially reluctant to adopt it. But the opposite has been achieved. The central bank, which is mandated to manage the euro for the nations that share this currency, has been able to control the rate of inflation and maintain it at a point below but close to two percent.
The success story that is the euro and the European central bank is attributable to several factors. Some of them are prudent financial management and successful control of the inflation rate.
Objectives of the Study
Throughout this study, the writer will be guided by one major objective. That is the analysis of the factors that have led to the success of the European central bank and the euro in general. To achieve this, the writer will be guided by various specific objectives. It is through the address of these specific objectives that the writer will effectively address the major objective of the study. The specific objectives are as outlined below:
1. successes of the European central bank
2. factors leading to this success
3. challenges facing the European central bank
4. successes of the euro
5. factors leading to this success
6. challenges faced by the euro
7. performance of the economy of the Eurozone
Performance of the Eurozone's Economy
Some of the successes of both the euro and the European central bank can be reflected in the successes of the economies of the Eurozones. Tumpel (2009) is of the view that there have been palpable changes in the economy of these nations as soon as they adopt the euro and come under the jurisdiction of the European central bank.
One of the areas that these economies have excelled in is the creation of employment (Noyer, 2007). Over the course of the past ten years, the employment rates at these economies have increased. The improvement may be conceptualised as a reflection of the progress that has been made as far