SEEU Review vol. 5 Nr. 2 (pdf) - South East European University

SEEU Review Volume 5, No. 2, 2009
members 10 . The European Central Bank members mandate is 8 years;
minimum 5 years 11 and they can not be reappointed.
According to the statute, the governor of a Central Bank can be dismissed
only when he doesn’t accomplish his/her duties or when (s)he is a bad
manager of the central bank 12 . To avoid bad management, chief executive
officers must have a high level of professional qualification 13 .
Southeastern Europe central banks have a high level of institutional
independence because these banks generally are independent from other
institutions in achieving their objectives. We say “generally” because the law
of the central bank in Macedonia and the law of the central bank in Serbia
states that the central bank must coordinate with the respective government
for the achievement of its objectives. So, these central banks are not free to
state their monetary policy.
Southeastern European central banks match one of the conditions of the
Tractate - the mandate of the governor and the mandate of Supervisory
Council members is generally above 5 years, and the governor and chief
executive officers must be experienced and have academic titles. The laws
determine the incompatibility of the position of Supervisory Council
member with other functions. Also the governor is dismissed when he
commits a crime, makes fake declarations, misses the Council meetings, etc.
The laws of Southeastern Europe countries are somewhat problematic
when we discuss about the Supervisory Council members dismissal. Some of
the articles must be reduced and simplified. Financial independence is made
of two components: limits to government lending and budgetary
independence. Some of the countries that we are studying prohibit direct
credit to the government. So, they have solved the problem of financial
independence. Albania and Serbia do not prohibit direct credit to the
government 14 . Croatia, Albania, Montenegro and Serbia do not prohibit
indirect credit to the government 15 . Only Bosnia – Herzegovina prohibits
both direct and indirect credit (they have currency board). Also to the
ownership and management of the budget is a very important component. In
Albania, Croatia, Macedonia and Romania the capital is owned by the state.
In table 2 is given the information about the second component (budgetary
independence). There can be noticed that the central banks allocate part of
their profit to the reserve fund. These banks also allocate the residual profit
to government budget.
10
11
12
13
14
15
Article 108 of Tractate and article 7 of Statute
Articles 11 (2) and 14 (2) of the Statute
Article 14 (2) of the statute
Article 112 (2) (b) of Tractate and article 11.2 of statute
Direct crediting is allowed in special cases and it is well controlled
Central banks can buy treasury bonds in the secondary market.
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