Select Committee on European Union Forty-Second Report



Note: Terms defined elsewhere in the Glossary are shown in italics.

BDI: The Federation of German Industries

BSC: Banking Supervision Committee, a committee of the ESCB that provides structural and macroprudential analyses.

CEPR: Centre for Economic Policy Research

CEPS: Centre for European Policy Studies

CER: Centre for European Reform

CFS: Center for Financial Studies

ECB: European Central Bank

Ecofin: The Council of Ministers of the EU responsible for Economic and Financial Affairs; it is made up of the economics and finance ministers of the Member States.

EFC: Economic and Financial Committee. In accordance with Article 114(2) of the EC Treaty, an Economic and Financial Committee was set up at the start of the Stage Three of EMU. For further information on the EFC, see the Council Decision of 21 December 1998 on the detailed provisions concerning the composition of the Economic and Financial Committee (98/743/EC), together with the Council Decision of 31 December 1998 adopting the Statutes of the Economic and Financial Committee (1999/8/EC).

EMAC: The Committee on Economic and Monetary Affairs of the European Parliament

EMU: Economic and Monetary Union

ESCB: The European System of Central Banks, which consists of the ECB and the national central banks of all the Member States of the EU.

EU: European Union

Euro area: Term used to refer collectively to those Member States which are participating in Stage Three of EMU, that is, who have adopted the euro. Currently, twelve of the fifteen Member States have adopted the euro: Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland.

Eurogroup: The group of government finance ministers of the Member States in the euro area; they meet every time there is a meeting of Ecofin.

European Council: The European Council consists of the heads of state or government of the EU.

Eurostat: The Statistical Office of the European Communities, which is based in Luxembourg.

Eurosystem: The central banking system of the euro area, which is constituted of the ECB and the national central banks of the Member States that have adopted the euro.

Eurozone: See euro area

Federal Reserve System: The central banking system of the United States of America. Established in 1913, it began to operate in November 1914. Its setup, although somewhat altered since its establishment, particularly by the Banking Act of 1935, has remained substantially the same.

FOMC: The Federal Open Market Committee is the most important monetary policymaking body of the Federal Reserve System.

GDP: Gross Domestic Product

HICP: Harmonised Index of Consumer Prices developed, compiled and disseminated by Eurostat in close co-operation with the national statistical institutes.

IGC: Inter-Governmental Conference - the negotiations that are held between the governments of the Member States with a view to amending the Treaties.

IMF: International Monetary Fund

M3: In December 1998 the ECB announced that "M3 will consist of currency in circulation plus certain liabilities of Monetary Financial Institutions (MFIs) resident in the euro area and, in the case of deposits, the liabilities of some institutions that are part of central government (such as Post Offices and Treasuries). These liabilities included in M3 are: overnight deposits; deposits with an agreed maturity of up to two years; deposits redeemable at notice up to three months; repos; debt securities with maturity of up to two years; unit/shares of money market funds and money market paper (net)." (See also monetary aggregates.)

Monetary aggregates: a monetary aggregate can be defined as the sum of currency in circulation plus outstanding amounts of certain liabilities of financial institutions that have a high degree of "moneyness" (or liquidity in a broad sense). The narrow monetary aggregate M1 has been defined by the Eurosystem as currency in circulation plus euro area residents' (other than central government) holdings of overnight deposits with euro area money-issuing institutions. The monetary aggregate M2 comprises M1 plus deposits with an agreed maturity of up to two years and deposits redeemable at notice of up to three months. The broad monetary aggregate M3 includes M2 plus repurchase agreements, money market fund shares/units and money market paper and debt securities with a maturity of up to two years. The Governing Council has announced a reference value for the growth of M3.

MPC: Monetary Policy Committee of the Bank of England, which sets interest rates for the UK.

NCB: National central bank of one of the Member States of the EU.

Policy mix: The overall stance of fiscal and monetary policy. The policy-mix may consist of various combinations of expansionary and restrictive policies, with a given fiscal stance being either supported or offset by monetary policy.

SGP: Stability and Growth Pact

TEC: Treaty establishing the European Community

UNICE: Union of Industrial and Employers' Confederation of Europe

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