Analysis of the degree of legal independence of the Croatian National bank and the National bank of the Republic of North Macedonia

Abstract

The stability of each country's monetary system depends on the quality of operations of its Central Bank, as one of the most important institutions. Due to their great importance, central banks hold a special place in scientific analysis. For a Central Bank to successfully achieve its objectives, it has to operate independently of the executive and legislative powers. Through content analysis and the comparative method, this paper analyzes and compares different parameters and indices measuring the independence of the central banks of the Republic of Croatia and the Republic of North Macedonia. Considering that the independence of a Central Bank is inextricably linked with its credibility, this paper conducts research that answers the question - what is the level of legal independence of the Croatian National Bank and the National Bank of the Republic of North Macedonia? It can be said that, in the last decade, both the legal and actual independence of these central banks has reached its peak, but a certain degree of political dependence is still noticeable. There are certain differences in terms of political influence from country to country, but in any case, the syndrome of political dependence in former Yugoslav countries when compared to developed countries is extremely recognizable. The Republic of Croatia, as a member of the European Union, had to harmonize its laws on this issue, so it can be said that there are certain differences compared to other countries in this region. Central banks in countries that once belonged to the same Communist bloc, and which today have different statuses in relation to the European Union, are excellent examples for analyzing the degree of operational independence in relation to state power. The status of the Central Bank in a certain national and economic system depends on the legislation of that country, i.e., the constitutional norms and laws governing the Central Bank.