[MUSIC] The European Central Bank is the European institution in charge of monetary policy in the Eurozone. It sits in Frankfurt, Germany. The Eurozone also called the Euro area goes a step further in the stages of economic integration than a mere economic union. All it's members have agreed to adopt the same monetary policy and form as such an economic and monetary union. This entity goes well deeper than the customs area in the single market presented in the first class. I have a quiz for you, how many members of the EU today are also members of the Eurozone? 10, 15, 18, 22, 28. The answer is 18 at least today. Since it's inception in 99, the European Zone, the Eurozone, keeps expanding. And generally, in 2014, Latvia was the latest member to join the group, that's why we have 18 today. Lithuania could follow as soon as 2015. All other member states committed to joining the club eventually except the UK and Denmark was to stay outside. So we may expect more countries joining the Eurozone over the years. You know that to administer the European single currency, the ECB, the European Central Bank, has been entrusted with two major tasks, keep prices stable and thus ensuring conditions for a balanced economic growth. But also authorizing the issuance of your banknotes. In discharging this task, the ECB is fully independent, and somehow supervises the activities by the different central banks. This means that members of the executive board were monetary experts appointed by the member states as well as members of the government council, composed of the executive board, then the governance of the national central banks of the Euro area cannot receive any instructions from member states or other European institutions regarding the decisions they shall take. The ECB is also ensuring that customers and companies that can make always faster, safer and easier cash lists your payments throughout Europe. As you may know, in the aftermath of the financial in Europe crisis, which slapped Euro countries like Greece and Ireland, the ECB received new missions from the national governments. Notably, the ECB was asked to supervise international banks, and indirectly fund European countries struggling to sustain their national budget. It formed with their European Commission and the International Monetary Fund, the so called Troika, which organize a lending to the governments of Greece, Ireland, Portugal and Cyprus under very controversial conditions. You might have heard about conditionality attached to those particular lots. But let's go back to the ECB itself, and I have a quiz for you. Why did the ECB choose to take unprecedented actions during the Euro crisis? Because interest rates for public bonds in some States were so high that these countries could not afford to borrow anymore. This is the first answer. The second answer is, because banks lost confidence in the functioning of their financial markets, some requesting State aid or even failing. Third answer, because the financial turmoil threatened to triggered a crisis in the real economy, leading to massive depression and record unemployment. And last answer, because risks existed that the Euro area would break into pieces. There's a fifth answer, all of the above. And the answer is, all of the above. You must observe that although none of these reasons were linked to concern about the inflation target, the first mandate entrusted to the ECB. You remember the first I mentioned. The bank decided, however to step in. Such an interpretation of the ECB's prerogatives led to criticism from economists and politicians, mostly in Germany. We believe that the ECB should have stick to it's traditional and more conventional role. Like other institutions the ECB role has been and is still evolving. Maybe more than any other European bodies. The European Central Bank can be depicted as a player who continuously changes its face, strategy, and mission within the Euro game. No surprise, then, it's current president, Mario Draghi, has received the nickname of Super Mario.