European Central Bank The European System of Central Banks (ESCB) was established in accordance with the Maastricht Treaty and the Statute of the European System of Central Banks and of the European Central Bank. It comprises the European Central Bank (ECB) and the national central banks (NCBs) of all the States of the European Union. The ECB was established in June 1998 in Frankfurt am Main as aspecialised, independent organisation for conducting monetary policy and performing related functions, (its predecessor was the European Monetary Institute). It is a supra-national institution with its own legal personality and decision-making bodies (Governing Council, the Executive Board and the General Council) and powers. The ECB’s monetary policy decisions are taken by the Governing Counciland the Executive Board implements these decisions. Also, it’s the responsible for the daily management of the ECB. The third decision-making body, the General Council, will continue to exist as long as there are EU members which have not yet adopted the euro. Influences: We could see a reduction in the number of tourists coming from outside the Euro zone in the event of the Euro gaining valuebecause of the decisions made by the ECB. Also, if the ECB decides to increase the interest loan rate, we could see a reduction in the loans provided by the EIB and the EBRD. European Investment Bank It’s the EU institution in charge to provide financial support for the European Union objectives. It’s based in Luxembourg, it was formed in 1958 during the process that established the Treaty of Rome,with an explicit mandate to finance projects designed to advance the aims of regional integration in Europe. Since the 70’s the bank’s lending (and importance) has grown exponentially, such that it is now the world’s largest multilateral lending institution, its yearly lending volume exceeding that of the World Bank since 1993. EIB loans during 2002-2006 within the EU alone shows a total of €196.6million covering ten key areas, with, for example, €55.9 billion for transport projects, €15.4 billion targeted at industry, €55.3 billion of “credit lines” (funds provided to financial intermediaries like banks for the funding of small or medium-scale investment projects) and €14.6 billion for health and education. Example: The European Investment Bank (EIB) is providing Austria’s touristindustry with a EUR 110 million loan. This new credit line will take the form of an “EIB loan for SMEs” to Österreichische Hotel- und Tourismusbank Ges.m.b.H. (ÖHT), in a continuation of the EU bank’s 15-year cooperation with ÖHT.
The tourist industry is of key importance to Austria. The sector has been relatively untouched by the recent global economic crisis, and small businesses in particular haveeven strengthened their competitiveness and stepped up their investment. In order to relieve the persistent difficulty obtaining long-term finance, however, the EIB has decided to continue its support for Austria’s hotel and tourist industry with long-term low-interest loans. European Bank for Reconstruction and Development (EBRD) Since 1990 the EIB has been lending money to countries in EasternEurope to help towards their transition to market economies. It also contributed to the establishment in April 1991 of the European Bank for Reconstruction and Development (EBRD), which has its headquarters in London, whose specific function is to lend money for this purpose, including to all the successor states of the Soviet Union. Although 40 countries participated in its establishment, morethan half of the EBRD’s capital of $10 billion was contributed by the European Community and its member states. The EIB’s share in the bank’s capital is 3%. Over the past decade the EBRD has invested substantial sums in the region and has helped to encourage private-sector investors. The EBRD’s clientele has grown from just a handful of transition countries in the early 1990s to 27 countries...
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