Glossary

General Glossary

G

General Council of the ECB 

One of the governing bodies of the European Central Bank (ECB). It comprises the President and the Vice-president of the ECB and the governors of all the central banks of the European Union. The four remaining members of the Executive Board of the ECB may participate, without voting rights, in the Council's meetings. It is a "temporary body" in charge of the tasks that must still be carried out in the third stage of EMU due to the fact that several EU Member States have not yet joined and, therefore, have not adopted the euro or participate in the formulation and enforcement of single monetary policy. Its functions include advisory and statistical tasks and the standardisation of accounting rules. It also contributes to the preparations for the irrevocable fixing of exchange rates with respect to the euro of the currencies of those Member States which have not yet adopted the euro as the single currency. The President of the General Council is also the President of the ECB and, unless stated otherwise, decisions are taken by simple majority.

General government 

A sector of the economy defined in the European System of Accounts 1995 (ESA 95) as comprising the central government, regional governments, local governments and social security funds. Excluded are government-owned entities that conduct commercial operations, such as public enterprises.

Gilt-edged security  

A government debt security with annual interest payment, called a coupon, and issued for a period of between two and five years. Currently they are typically issued for periods of three to five years.

Giro  

A business instrument used to pay or settle a transaction. It normally implies a money transfer in cash.

Governing Council of the ECB 

The main governing body of the European Central Bank (ECB), the Eurosystem and the European System of Central Banks (ESCB). It comprises the members of the ECB Executive Board and the governors of the national central banks of those EU Member States whose currency is the euro. Its president is the president of the ECB. Its main responsibilities are: to formulate monetary policy for the euro area. This includes decisions relating to monetary objectives, key interest rates and the supply of reserves in the Eurosystem; to carry out foreign currency exchange operations; to promote the smooth operation of payment systems in the euro area; to authorise the issuing of banknotes in the euro area, notes issued by the ECB and national central banks, and the volume of metallic coins issued in euros; to reach agreements and adopt the necessary legal instruments to guarantee, in the euro area, the fulfilment of the basic functions assigned to the ESCB by the Treaty establishing the European Community. Each member has one vote and, except when stipulated otherwise, decisions are made by simple majority and in case of a tie, the president decides. In practice, an important part of the decisions are taken by consensus. In the case of decisions on financial matters relating to the national central banks in their capacity as shareholders of the ECB, Governing Council member votes will be weighted according to their share in the capital subscribed to the ECB, the weight of the members of the Executive Board being zero. The Council usually meets twice a month. At its first meeting each month, the Governing council assesses economic and monetary developments and makes decisions, among others, on the modification of the euro area interest rate. In order to maintain the efficiency of the Council, when its number of members substantially increased after the incorporation of new EMU Member States, the Council of the European Union, based on a recommendation by the ECB, established on 21 March 2003 that the members of the ECB Executive Board will conserve their zero vote, but the number of governors with the right to vote will not exceed fifteen, although all governors will attend the Council meetings and participate in the deliberations. Therefore, from the moment that there are more than fifteen governors in the Council, they will exercise the right to vote by a rotation system. To this end, they will be divided into several groups which will be assigned a number of votes that their members will take turns to exercise. When the number of governors is between sixteen and twenty-two they will be classified into two groups and, when this last number is exceeded, into three groups, according to an indicator of the relative size of the economy of their respective States. This indicator will be calculated taking into account their investment in the gross domestic product and in the balance sheet of the financial institutions of the euro area.

Government debt  

The debt issued by state or regional governments.

Government debt indexed to inflation 

Debt securities issued by general governments, whose coupon payments and capital are linked to a specific consumer price index.

Government net borrowing/lending 

In terms of national accounts, it is the difference between the current and capital resources and employment of the government. It can also be defined as the difference between the net variation of financial assets and net variation of financial liabilities of the government. This concept does not coincide with that of cash surplus (+) or deficit (-), which emcompasses the differences between government non-financial earnings and expenditure in terms of budget settlement.

Grammage 

This is a characteristic of paper. It is defined as the mass of paper per surface unit (g/m2). Most of the physical characteristics of paper are closely and proportionally related to the grammage. Euro banknotes have a similar grammage to the previous national banknotes.

Gresham's Law 

Gresham, Sir Thomas. English financier (London, 1519-1579). Founder of the London Stock Exchange, he is also attributed the formulation of the law that bears his name, whereby in a monetary system formed by currencies of differing values, the least appreciated currency drives out that of higher value.

Gross domestic product (GDP) 

The value of an economy's total output of goods and services, less intermediate consumption, plus net taxes on products and imports. GDP can be broken down by product, expenditure or income components. The main expenditure aggregates that make up GDP are household final consumption, government final consumption, gross fixed capital formation, changes in inventories, and imports and exports of goods and services.

Gross operating surplus 

The surplus (or deficit) generated by production activities after deducting the labour factor input, the remuneration of employees and taxes minus production grants, and before considering income and expenditure for income originated by loan and rental operations, and income generated by ownership of financial assets and non-produced assets.

Guarantee  

A synonym of surety: It assures that a person complies with the commitment he/she has subscribed.

Guilloche pattern 

A curved pattern of fine, unbroken lines, difficult to reproduce.