The European Central Bank, which was established on June 1, 1998, months before the adoption of the single currency, aims to maintain price stability and translates today into an inflation level of 2% in the medium term.
Today, Wednesday, the European Central Bank holds a grand celebration of the quarter-century since its founding, which was marked by crises that forced it to expand the limits of its activity, in the midst of its battle to confront inflation.
About 200 invitees are expected to arrive at the headquarters of the Monetary Agency in Frankfurt, Germany, as of 6:15. Music by Claude Debussy will be played while European Central Bank President Christine Lagarde and two of her predecessors Jean-Claude Trichet and Mario Draghi will cut a cake.
Eurozone inflation, which reached a record level – it was still 7% in April – will overshadow the backdrop of energy and imported commodity prices, which have risen since the recovery after the Covid pandemic and Russia’s invasion of Ukraine.
“This does not preclude that we have good reason to celebrate at the European Central Bank,” Lagarde told Dutch television channel Boetenhof. “25 years ago our aim was to ensure price stability, better European sovereignty and to show greater solidarity: we have kept our commitments on these three points,” she added.
The European Central Bank, established on June 1, 1998, months before the adoption of the single currency, aims to maintain price stability and translates today into an inflation level of 2% over the medium term.
However, in parallel with this overall good result, the institution witnessed several crises. It had to come to terms with the defects of the monetary union that led to existential crises such as the risks of the collapse of the euro in 2010 due to the public debt crisis in the European Union.
This was followed by a long period of slow inflation, followed by a rise in prices that had been recorded for more than a year.
And the organization made huge mistakes. In 2011, Jean-Claude Trichet raised interest rates as a crisis loomed. His successor, Mario Draghi, corrected the situation immediately after assuming his duties, and later won the title of “Super Mario”, the savior of the eurozone.
But the Italian’s uniqueness in managing the institution led to a disagreement within the Board of Governors, which is made up of national central bank governors who have divergent ideas about correct monetary policy.
And Christine Lagarde, thanks to her good management, contributed to closing the ranks.
“With every crisis the ECB has succeeded in innovating and adapting,” says Frederic Ducrosie, chief economist at Pictet Wealth Management. “This is something to remember before highlighting mistakes or internal tensions.”
Today, the European Central Bank employs 4,200 people who, since 2014, have been supervising the major banks in the eurozone. His mission is still evolving and he wants to change his monetary policies to meet the need to combat climate change.
As for the euro, which is used by nearly 350 million Europeans in 20 countries, “it will remain present for several years to come,” according to Lagarde.
The European Bank launched the Digital Euro Workshop to create a new payment method in response to the proliferation of cryptocurrencies.