ESCB – Eurosystem: what is the difference?

The Maastricht Treaty provides for all the countries of the European Union (EU) to adopt the single currency. The authors of the Treaty used the expression "European System of Central Banks" (ESCB) to refer to the European Central Bank (ECB) and all the national central banks (NCBs) of the EU, thereby implying that all EU Member States would adopt the euro over time.

When it became clear that not all countries of the EU would adopt the euro, it was necessary to distinguish both groups, on the one hand, the euro area Member States’ NCBs and, on the other hand, the EU Member States’ NCBs as a whole.

Hence, a distinction is made between:

• The Eurosystem, which comprises the ECB and the NCBs of all the countries of the euro area, and
• The ESCB, which comprises the ECB and the NCBs of all Member States of the European Union.

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