Europe

Serbia law tightens control over central bank

  • 4 August 2012
  • From the section Europe
Incoming Serbian Prime Minister Ivica Dacic addresses parliament in Belgrade, 26 July
The new PM, Ivica Dacic, faces the task of reviving a struggling economy

Serbia's parliament has approved a new central bank law criticised by the EU and IMF, who say it strips away the bank's independence.

The central bank's governor, Dejan Soskic, resigned on Thursday in protest at the new law.

Parliament will have supervisory powers over the bank's executive board.

The nationalist-led government also gets the right to name the bank's top managers. The EU says the law is a step back for Serbia's bid to join the bloc.

The EU made Serbia an official candidate for membership in March - but that was before elections which resulted in a new nationalist-socialist coalition government in Belgrade.

The previous pro-Western Serbian government had put the country on the path towards EU membership, making a significant concession over Kosovo. The territory's unresolved status remains a big challenge in the EU negotiations, however.

The International Monetary Fund has warned that the central bank law will amount to a "major weakening" of the bank's autonomy. Serbia has been trying to get a $1.3bn (£830m) loan from the IMF.

An MP in the nationalist Serbian Progressive Party, Jorgovanka Tabakovic, is expected to become the new central bank governor.

The new prime minister, Ivica Dacic, used to be spokesman for the late nationalist leader Slobodan Milosevic, who was accused of war crimes and died in custody in The Hague.

The reformers who ousted Milosevic 12 years ago are largely now back in opposition.

More on this story

Related Internet links

The BBC is not responsible for the content of external Internet sites