Vesna Luković

5th International Conference – ERAZ 2019 – KNOWLEDGE BASED SUSTAINABLE DEVELOPMENT, Budapest – Hungary, May 23, 2019, CONFERENCE PROCEEDINGS

Published by: Association of Economists and Managers of the Balkans – Belgrade, Serbia
Conference partners: Faculty of Economics and Business, Mediterranean University, Montenegro; University of National and World Economy – Sofia, Bulgaria; Faculty of Commercial and Business Studies – Celje, Slovenia; Faculty of Applied Management, Economics and Finance – Belgrade, Serbia;

ISBN 978-86-80194-20-2, ISSN 2683-5568, DOI:


Legal independence of a central bank is a necessary but not a sufficient condition for actual independence. There might always be incentives to circumvent the legal framework with an aim to influence the behaviour of the central bank. That has a particular importance in transition economies. This paper sheds new light on policy choices when preparing to enter the European Union and euro area from the viewpoint of central bank independence in transition economy. The paper shows how to adjust to the legal provisions of the Eurosystem and, at the same time, achieve Maastricht convergence criteria to join the euro area.

Key words

independence of the central bank, convergence, transition economy.


[1] Draghi, M. (2018) Central Bank Independence, Lamfalussy Lecture by M. Draghi, President
of ECB on 28th October 2018 at the Bank of Belgium (e-source), pp. 1-8
[2] Wagner, H. (1999) Central Bank Independence and the Lessons for Transition Economies
from Developed and Developing Countries, Comparative Economic Studies, XLI, no.4,
pp. 1-22
[3] Fischer, S. (1995), Central Bank Independence in the Transition Economies, Speech at
the seventieth anniversary of the Hungarian Central Bank, Budapest, November 1994,
(e-source), pp.1-19
[4] Cukierman, A., Webb, B.S. and Neyapti, B. (1992) Measuring the Independence of Central
Banks and Its Effect on Policy Outcomes, The World Bank Economic Review, vol.6,
no.3, pp. 353-398
[5] Freytag, A. (2003), Central Bank Independence in Central and Eastern Europe on the Eve
of EU-Enlargement. Ljubljana, Institute of Economic Research, Occasional Paper no.4.,
[6] Bernanke, B.S. (2010), Central bank independence, transparency, and accountability,
Bank of International Settlement Review, no. 72/2010, pp.1-8
[7] Issing, O. (2018), The uncertain future of central bank independence, Column, taken from
a VoxEU eBook (e-source), pp.1-5
[8] Lavrač, V. (1999), Exchange Rate of the Slovenian Tolar in the Context of the Slovenia’s
Inclusion in the EU and in the EMU, Inštitut za ekonomska raziskovanja, Working Paper
no.1, pp. 2-20
[9] Loungani, P. and Sheets, N. (1995), Central Bank Independence, Inflation and Growth in
Transition Economies, Board of Governors of the Federal Reserve System, International
Finance Discussion Paper no. 519, pp.1-35