Dignitaries from all over Europe have been putting on their party clothes to celebrate the tenth birthday of the European Central Bank. Mandated under the Maastricht Treaty to fight inflation, the ECB has its work cut out. The usually low rates in euro nations, have been surging to record highs.
The Bank’s President Jean-Claude Trichet said: “Ten years ago, in June 1998, the European Central Bank was founded, together with the European System of Central Banks – the ESCB. Jean Monet write in his memoire – “rien n’est possible sans les hommes, rien n’est durable sans les institutions.” (Nothing is possible without people. Nothing is sustainable without institutions.) The ECB is, in my opinion, a remarkable illustration of the lucidity of the conceptual founder of the community.”
The ECB took its first breath as 11 European countries drew closer to merging their currencies. Half a year later, the euro emerged onto the financial markets. After a low point against the dollar in October 2000, Trichet saw the currency recover strongly – some say too strongly.
There has been criticism that the euro’s strength – potentially harmful to european exporters – is a result of the ECB’s steadfast refusal to control inflation by cutting interest rates, like America and Britain have done. And once the guests leave the party, the birthday boy is facing a credit crisis, and astronomical oil prices.