MOST Continues to Criticize Croatian National Bank

Total Croatia News

By insisting on voting on HNB’s reports, MOST want to bring about changes in the law.

All western countries have the ability to send state audit office representatives to their central banks, and we believe that Croatian National Bank (HNB) should be supervised by Croatia’s State Audit Office, said Member of Parliament Ines Strenja Linić explaining why MOST was insisting on voting on HNB reports in Parliament. By voting to reject the reports, MOST wants to prepare the ground for a change in the law which would allow audits of the Bank’s financial statements. In addition to criticising its monetary policies, MOST is convinced that HNB is spending too much money on various staff expenses, reports Večernji List on March 13, 2016.

Governor Boris Vujčić and the majority of HDZ argue that the vote would be against the agreement with the EU which guarantees independence of HNB. The Law on HNB says that the institution is independent in carrying out its duties and that other state bodies “shall not affect the independence of the Croatian National Bank, the adoption and implementation of decisions by the HNB, and may not approve, cancel, postpone or abolish any decision made by HNB within its jurisdiction”.

However, MOST says it does not want to influence HNB’s monetary policies. “While everybody is making cuts and savings, they are spending large amounts on their personal expenses which have nothing to do with their job”, explained MOST.

The Croatian National Bank has 135,000 kuna of annual operating costs per employee (utilities, office supplies, hospitality…), while for example the State Audit Office has 20,000 kuna per employee. A particularly interesting item is “other staff expenses”, on which the HNB spent nearly half a billion kuna from 2000 to 2014. In those 14 years, these expenses increased by as much as 74 percent, so in 2014 they amounted to 31.5 million kuna. The major part of these other expenses were interest subsidies for loans to employees, sports activities, squash, tennis, gym, saunas, massages… For example, according to MOST, the Croatian National Bank has for many years been subsidizing interest rates on loans for all employees who work for the HNB for more than a year. Employees pay interest rate on loans of 3 percent, while everything above that threshold is paid by the Bank.


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