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Legal independence of a central bank is a necessary but not a sufficient condition for actual independence. There might always be incentives to circumvent the legal framework with an aim to influence the behaviour of the central bank. That has a particular importance in transition economies. This paper sheds new light on policy choices when preparing to enter the European Union and euro area from the viewpoint of central bank independence in transition economy. The paper shows how to adjust to the legal provisions of the Eurosystem and, at the same time, achieve Maastricht convergence criteria to join the euro area.

CENTRAL BANK INDEPENDENCE IN TRANSITION ECONOMY JOINING THE EUROPEAN MONETARY UNION (WITH THE CASE OF SLOVENIA)