THE INDEPENDENCE OF CENTRAL BANKS IN STATES WHICH ARE CANDIDATE TO EUROPEAN UNION

Abstract

After the enlargement of the European Union to ten new Member States on 1 May 2004, they are four candidate countries: Bulgaria, Romania, Croatia and Turkey. In order to join the Union, they need to fulfil the economical and political conditions known as the Copenhagen criteria. Especially, the candidate States must adopt the common rules, standards and policies that make up the body of European Union law.

European Union legislation on Economic and Monetary Union (EMU) contains specific rules requiring the independence of central banks in Member States and prohibiting direct financing of public sector by the central banks. These rules must have been implemented by the date of accession.

Bulgaria, Romania and Croatia have taken major steps forward and have achieved a high level of alignment with the EMU-related acquis. However, some aspects of legislation on central bank independence need to be further corrected.

Turkey’s overall alignment concerning the EMU acquis is limited. The independence of the central bank should be further strengthened, particularly on the determination of the inflation target, on in the area of personal and institutional independence.