What, if anything, did the Constitutional Treaty do to the objectives and to the basic tasks of the European System of Central Banks (ESCB) and the European Central Bank (ECB)?
Did the intergovernmental conference (IGC 2004) facilitate European level prudential supervision of the financial sector?
We look at the contents of first Constitution clause in the section on monetary policy, within the context of economic and monetary union (EMU).
In the Treaty establishing a Constitution for Europe the provisions on monetary policy are located in Part III ‘The policies and functioning of the Union’, Title III ‘Internal policies and action’, Chapter II ‘Economic and monetary policy’, Section 2 ‘Monetary policy’.
The objectives and the basic tasks of the European System of Central Banks and the European Central Bank are found in Article III-185, OJ 16.12.2004 C 310/81─82:
Article III-185 Constitution
1. The primary objective of the European System of Central Banks shall be to maintain price stability. Without prejudice to this objective, the European System of Central Banks shall support the general economic policies in the Union in order to contribute to the achievement of its objectives as laid down in Article I-3. The European System of Central Banks shall act in accordance with the principle of an open market economy with free competition, favouring an efficient allocation of resources, and in compliance with the principles set out in Article III-177.
2. The basic tasks to be carried out through the European System of Central Banks shall be:
(a) to define and implement the Union's monetary policy;
(b) to conduct foreign-exchange operations consistent with Article III-326;
(c) to hold and manage the official foreign reserves of the Member States;
(d) to promote the smooth operation of payment systems.
3. Paragraph 2(c) shall be without prejudice to the holding and management by the governments of Member States of foreign-exchange working balances.
4. The European Central Bank shall be consulted:
(a) on any proposed Union act in areas within its powers;
(b) by national authorities regarding any draft legislative provision in areas within its powers, but within the limits and under the conditions set out by the Council in accordance with the procedure laid down in Article III-187(4).
The European Central Bank may submit opinions to the Union institutions, bodies, offices or agencies or to national authorities on matters within its powers.
5. The European System of Central Banks shall contribute to the smooth conduct of policies pursued by the competent authorities relating to the prudential supervision of credit institutions and the stability of the financial system.
6. A European law of the Council may confer specific tasks upon the European Central Bank concerning policies relating to the prudential supervision of credit institutions and other financial institutions with the exception of insurance undertakings. The Council shall act unanimously after consulting the European Parliament and the European Central Bank.
The next post is going to compare the Constitutional Treaty with the draft Constitution and look at some legislative materials on the Constitution.