EUROPEAN MONETARY UNION AND SERBIA

Original scientific paper
Autor: Prof. Ljiljana Lučić PhD

Summary: The paper analyzes the creation and development of the EMU, along with the preconditions, prescribed by the Treaty on the Functioning of the EU, for EMU membership - i.e. economic and legal convergence criteria. The paper also lists the reference values of economic convergence criteria from the latest ECB Convergence Report 2010, which were operationalized back in 1995 by the EMI. The paper focuses on legal convergence and states the provisions of the Law on NBS, whereby the legal convergence of Serbia for membership in the EMU has been achieved. The author expresses his opinion that for Serbia, at this stage of joining the European integrations process, the transposition of provisions from the Treaty on the EU into the Law on NBS might be premature, unnecessary and potentially detrimental. Also, the author underlines the importance of reaching the sustainable level of economic convergence criteria before transposing the legislative provisions of the Treaty on the EU. The Law on NBS explicitly forbids the financing of short-term budgetary imbalances by means of funds provided by the monetary authorities of Serbia, although the effects of such borrowing cannot be equal to the effects caused by long-term deficit financing of the budget. The Serbian budget is directed to borrowing, short-term, at market conditions. The paper states an opposite example - that of Sweden - which, “just in case”, even after 13 years of being a Member State with a derogation, has not transposed the ban on monetary budget financing into its legislative system so literally.

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