But the analysis of the euro area will be undertaken centrally to a large extent and the level of interest rates will be decided by the ECB Governing Council, which consists of the members of the ECB’s Executive Board and the NCB Governors of the, initially eleven, participating countries. The European System of Central Banks (ESCB) has been given a highly independent status so as to be in a position to conduct a monetary policy for price stability without short-run political considerations. But its independence does not relieve the ECB of the duty to inform and communicate. On the contrary, it accentuates the need for a dialogue and exchange of information. The European Parliament has displayed a high profile in these matters and worked to establish a basis for discussing and monitoring monetary policy continuously. The ECB will be obliged to make difficult decisions in various matters. One problem may arise from cyclical disparities between euro area countries. While these disparities may diminish over time, they are unlikely to disappear completely. Meanwhile, the ECB has to set a single instrumental rate for the whole monetary union. The common interest rate will normally not be ideal in relation to the economic situation in every country. The national financial structures also differ considerably, which means that, for instance, interest rate sensitivity varies.
For instance, it confirmed the rather worrisome result that financial knowledge amongst young persons of age 18-29 years in general is rather low. In particular, they score 4.4 out of 7 compared to 5.3 out of 7 for the 40-49 age group. Econometric evidence also shows they are 3.2 times less likely to achieve the minimum score of 5 out 7 in knowledge questions than the 40-49 age group. According to the international literature, it is crucial for policymakers to intervene and ensure that financial literacy is taught as a course in the school curriculum early on when children are active, keen learners and more willing to get educated about new concepts. Therefore, schools as an environment conducive to learning, play an essential, if not the most important role, in the formulation of a National Strategy in order to address the problem of financial illiteracy early on in an individual's life. Further to the analysis undertaken by CBC staff in support of the work of the Committee, online meetings and regular contacts have taken place between the Committee and a team of distinguished scientific collaborators, who have specialised and international expertise in the field. Namely, Dr Adele Atkinson (Atkinson Financial Research and Policy, formerly from the OECD), Dr Maria Demertzis (Deputy Director at Bruegel), Prof. Michalis Haliassos (Goethe University Frankfurt), Prof. Alexandros Michaelides (Imperial College London), and Prof. Dennis Philip (University of Durham) whom I have already mentioned.