Croatian National Bank (HNB) Receives European Central Bank Opinion on Proposed Amendments to HNB Act  


euro_velika_ecb_07 November 2016, VG Intelligence Weekly Issue 29

According to 7 initial demands requested by the Bridge of Independent Lists (MOST) during the Government coalition negotiations with the Croatian Democratic Union (HDZ), the Croatian National Bank (HNB) Act should be amended, allowing for the Croatian Parliament (i.e. Sabor) a bigger oversight over the HNB. The act was debated in the Sabor this week. The Ministry of Finance sent a request to the European Central Bank (ECB) to obtain their official position on the proposed amendments. On 28 October, the ECB adopted its opinion, reminding that the HNB’s power and performance must not be subject to government influence, and that any type of state audit control should be clearly defined and in line with the principle of institutional independence. In this respect, the ECB assessed the proposed changes to be unclear and contradictory, meaning that the scope of the State Audit Office’s control is not clearly defined by the legal framework, and is not without prejudice to the activities of HNB’s independent external auditors. The State Auditor should not be in a position to give instructions to the HNB. Additionally, the Sabor’s competency to vote on and adopt the HNB’s Annual Report on its activities and semi-annual HNB’s financial condition, the level of price stability achieved and monetary policy implementation would affect the HNB’s institutional independence, as it goes beyond the transparency and accountability obligation of a central bank towards a national parliament. Any right of the Sabor to approve, suspend, annul or defer HNB’s decisions would be contrary to the HNB’s institutional independence under the Treaty and the Statute of the European System of Central Banks (ESCB). This year, the ECB has already issued an opinion on similar amendments initiated by 45 Sabor MP’s in May…

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