Central Banking in Transition Countries

Issues Pertaining to the Independence of Central Banks in Central Europe

Abstract

The independence of central banks in the Czech Republic, Poland, and Hungary was realized during the process of EU accession and the introduction of inflation targeting schemes in order to achieve a price level in accordance with the Euro convergence criteria. However, despite joining the EU, the laws of the central banks in all these countries were to be amended to curtail their independence due to recessions and repeated deviations from targets. This is of great significance because these attempts to amend the existing laws happened in the "advanced" transition countries. Such incidents once again bring into focus issues pertaining to the independence of central banks in transition countries.