earticle

영어

Since 1999 the Europe has been incorporated into a single currency area, which is the second largest economic zone in the world after the United States. The euro is now the currency for 300 million people. After the establishment of European Monetary Union(EMU) in 1999 European Central Bank(ECB) has played crucial roles in stabillizing the euro. This study examined the structure of ECB’s monetary policy and evaluated the performance of ECB in last two years. The primary object of ECB’s monetary policy is to maintain the price stability in euro area. To achieve it ECB has two pillar strategy of monetary policy. The first pillar is money(M3) based on the monetary nature of inflation beyond the immediate horizon. In parallel, the second pillar ensures that other forms of analysis, such as the investigation of the interplay between supply and demand and cost-push dynamics, are also incorporated into the policy process.This study supports that the monetary policy of ECB was evaluated to be sucessful in economic growth and price stability in last two years even though HICP(Harmonized Index Consumer Price) was above the object level of 2% in 2000. The euro has proven to be a stable currency for Europe and the world economy. However, the system of ECB’s monetary policy should be implemented in two points. First, the authority of supervising the financial institutions must be assigned to ECB in order to cope with the increasing cross-border transactions. Second, it is essential to provide ECB with the role of the lender of last resort. It has a play role in lessening the economic and psychological uncertainty surrounding the euro area. The bank notes and coins of the euro will be introduced from the early in 2002. Since 2001 ECB has faced many challenges to support sustainable non-inflationary growth. The US economy slowdown and the surge of oil price has been the greatest risk factors for ECB. The German and France economies, which are the largest members in the euro area, have already experienced the decline in growth rate and the increase in price level. The ongoing current structural reforms, such as more flexibility in labor market and removing barriers to investment and encouraging efficient adoption of new technologies, remain essential in order to improve the functioning of market. And ECB should gain the trust of the public by improving the transparency of the determination of monetary policy and the market oriented policy.