MPs criticise central bank

Parliament on Thursday discussed the Croatian National Bank's (HNB) work in 2014, with MPs criticising it for advocating the protection of banks and neglecting the economy and citizens, and questioning the stability of the national currency.

Governor Boris Vujcic said that the "HNB, using monetary policy instruments, supported the improvement of conditions for financing the state, banks and the private sector, and encouraged lending on the domestic market, while maintaining the stability of the nominal kuna-euro exchange rate, as a key prerequisite for maintaining financial stability."

"We have an artificially healthy currency, we have super healthy money in a very sick economy, which is impossible by all economic criteria," said Ivan Lovrinovic of the ruling Bridge party, adding that the stability of the kuna was maintained primarily by borrowing abroad.

He said that for the third year in row Croatia was faced with deflation, without indications or clear monetary policy steps to eliminate it. "The fact that we have deflation means that we have price instability, which makes it clear that the HNB hasn't fulfilled its key goal as defined by law."

Ivo Jelusic of the opposition Social Democrats (SDP) said the HNB neglected, underestimated and "frequently exploited" the economy and citizens, accusing it of "financial neocolonialism." Gordan Maras (SDP) said the HNB could not protect banks' interests in Croatia while neglecting the economy and citizens.

Goran Maric of the ruling Croatian Democratic Union (HDZ) said no country could have growth if retail lending exceeded corporate lending. "Yet we have a HRK 6.9 billion decrease in lending over one year, while simultaneously solvency doubled... Nothing in Croatia can develop on such a sick paradigm."

Miro Bulj of the Bridge party criticised the fact that the HNB governor and vice governor had markedly higher salaries than the president, the prime minister and the ministers, asking why they had not taken part in the austerity policy.

Last update: Thu, 03/03/2016 - 16:43
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