##ystem, the national central banks remain independent institutions that have the right to pursue activities in their own responsibility beyond monetary policy, e. g. financial market supervision. • fifth, the national central banks are investors in the ecb ; together, they own shares of the ecb and are thus entitled to equivalent shares of the ecb ’ s profit. 5. 1 shaping the single monetary policy and the primary objective of price stability i would now like to go into more detail in explaining the national central banks ’ five key areas of responsibility. as i mentioned before, the national central banks participate in shaping the single monetary policy in the eu. to ensure that the ambitious goals of monetary union are accomplished, the maastricht treaty sets out a clear and transparent framework for the institutional implementation of monetary policy in the euro area. as article 105 of the treaty establishing the european community stipulates, “ the primary objective of the escb shall be to maintain price stability. without prejudice to the objective of price stability, the escb shall support the general economic policies in the community. ” in other words, the maintenance of price stability is the most important guiding principle of the architecture of the european system of central banks. the clear hierarchy of objectives that the treaty establishes for the eurosystem reflects decades of practical experience and a large number of economic studies which suggest that monetary policy will contribute most to improving economic prospects and raising the living standards of citizens by maintaining price stability in a lasting way. to communicate the objective of price stability in a clear and comprehensible way to the general public, the governing council of the ecb defined price stability as the year - on - year increase in the harmonized index of consumer prices ( hicp ) for the euro area of below, but close to 2 %. in line with this definition, price stability “ is to be maintained over the medium term. ” the announcement of this definition is supposed to provide a firm anchor for expectations of future price developments. to achieve its price stability objective, the eurosystem has devised a monetary policy strategy. the approach to organizing, evaluating and cross - checking the information relevant for assessing the risks to price stability is based on two analytical perspectives, referred to as the two “ pillars ”. the first perspective, also called the pillar of “ economic analysis ”, is aimed at assessing the short to mediumterm determinants of price developments, with a focus on real activity and financial conditions in the economy. the second perspective

klaus liebscher : the role and functioning of the european system of central banks ( escb ) speech by mr klaus liebscher, governor of the austrian national bank, at the 5th legal alumni web of the salzburg seminar ( lawss ) symposium, salzburg, 6 july 2004. * 1. * * introduction i gladly accepted the invitation of the alumni web of the salzburg seminar to speak to you about the architecture and the functioning of the european system of central banks, addressing, in particular, the role of the oenb in this framework. in early 1999, the adoption of the single monetary policy by the ecb marked the successful transition to stage three of economic and monetary union ( emu ). the introduction of euro banknotes and coins as legal tender concluded the process of establishing a single monetary area, which at that point finally became a tangible reality for all european citizens. it is no exaggeration to say that the birth of the euro was a truly historic event. for the first time in history, a group of independent countries has relinquished its sovereign power to issue money to a newly created supranational institution and given up its national currencies to adopt a common currency. virtually over night, the euro became the single currency for 11 - and since 2001, when greece introduced the euro, for 12 - sovereign member states of the european union. together, these countries with a population of some 300 million represent an economic area comparable in terms of economic power to the u. s. market. economic and monetary union and the euro have been a success story : exchange rate risks between the member states of emu have been eliminated and there has been considerable progress in disinflation and economic convergence in the euro area. the euro is well on its way to firmly establish itself as an internationally renowned currency, thus becoming a solid cornerstone of the international monetary system. looking back, we can say that austria ’ s accession to monetary union represented a major step for the oenb, just like for all central banks of the participating countries. the integration into the escb with the european central bank ( ecb ) at its helm was an entirely smooth process. the national central banks of the euro area countries thus formally relinquished their monetary sovereignty. since january 1, 1999, the sole responsibility for the single monetary policy has been vested in the governing council of the ecb, which is independent and not bound by any instructions. let me underline at this point that the division of responsibilities