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Slideshow Serbia adopts central bank law despite EU, IMF criticism Tweet Share this Email Print Related News Former Milosevic aide takes power in Serbia, EU uneasy Fri, Jul 27 2012 Analysis & Opinion The problem of Japan’s household savings Will Poland have an “ECB moment”? Related Topics World » BELGRADE | Sat Aug 4, 2012 11:56am EDT BELGRADE (Reuters) - Lawmakers in Serbia adopted a law on Saturday stepping up parliamentary control over the central bank, despite stiff criticism from the European Union and International Monetary Fund that it threatens the bank's independence. Central bank governor Dejan Soskic has already resigned over the law, which the EU said would mark a "step back" for Serbia in its bid to join the bloc. It is the first law adopted under Serbia's new Socialist-led government, which is being watched closely by the West for any sign of drift from the pro-EU path set by reformers who ousted late strongman Slobodan Milosevic in 2000 but who are now in opposition. The law creates a powerful, parliament-appointed supervisory body represented on the bank's executive board and gives the assembly responsibility for appointing its entire top management. The ruling coalition under Socialist Prime Minister Ivica Dacic has pledged to pursue expansive fiscal policies to halt Serbia's slide into recession, and says the central bank should work for the same aim. Under Soskic, who resigned on Thursday, the bank stuck to a tight monetary policy, despite the economy contracting in the first two quarters of the year. At 10.25 percent, Serbia has the highest official interest rates in central and eastern Europe. Writing in the Serbian daily Politika on Saturday, U.S. Ambassador Mary Burce Warlick said the pressure put on Soskic and the proposed changes to the law "represent a failure of the rule of law and raise serious questions about the respect for independent institutions." Ruling coalition lawmaker Jorgovanka Tabakovic, a member of the nationalist Serbian Progressive Party and an economist by education, is widely tipped to take over as governor of the central bank. (Writing by Matt Robinson; Editing by Toby Chopra) World Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above. 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