Czech central bank may consider euro under President Zeman- press


10.02.2014 10:54

Prague - No supporter of the early adoption of the euro was allowed to the Czech CNB Bank Board until now, but this will start to change since President Milos Zeman is no Eurosceptic and his new man on the board, Jiri Rusnok, favours the euro, Jan Machacek writes in weekly Respekt out today.


Prezident Miloš Zeman (vpravo) jmenoval 5. února na Pražském hradě za přítomnosti guvernéra České národní banky (ČNB) Miroslava Singera (vlevo) Jiřího Rusnoka (uprostřed) členem Bankovní rady ČNB pro první funkční období. ČTK Krumphanzl Michal

Foreign Minister Lubomir Zaoralek (Social Democrats, CSSD) has said the new centre-left coalition government will try to prepare the country for introducing the single EU currency as soon as possible.

Rusnok, 53, who headed a caretaker government from June 25, 2013, until January 29, 2014, has been appointed a member of the Czech National Bank (CNB) Board as from March 1, 2014.

Rusnok will replace Eva Zamrazilova whose six-year mandate expires on February 28.

Machacek writes that some may be surprised by Zeman´s swift action in filling up the vacancy at the CNB while he wants to shift the duty to appoint professors and to grant pardons to else.

On the other hand, Zeman has quickly completed the Constitutional Court (US) and experts say he did so relatively well and professionally, Machacek writes.

Zeman may want to differ from his predecessor, Vaclav Klaus, who left the US half-empty. This may be also a reason why Zeman filled the post on the CNB Board with his man as soon as it was vacated, Machacek writes.

Another motivation cannot be ruled out. Zeman needs his own person on the CNB, the most powerful economic institution in the state, to keep him informed, Machacek writes.

On the other hand, the Bank Board is to be a team and it is up to the governor to tell his colleagues what team behaviour amounts tt, Machacek adds.

He writes that Rusnok, Czechoslovak Communist Party (KSC) alternate member until the regime´s fall in 1989, has long been connected with the country´s economic elite.

He worked with the state planning commission under the previous regime and also after its fall, and for trade unions. He was gradually minister of finance (2001-02) and of industry (2002-03), a member of the government of Petr Necas (Civic Democrats, ODS) National Economic Council (NERV), he is an expert on the pension system, Machacek writes.

Within the Czech environment, Rusnok is a "routine choice," but he probably knows nothing about the revolutionary changes in the world´s central banking over the past few years, and the same probably applies to the U.S. quantitative easing, Japanese abenomics and a range of instruments of fighting deflation, Machacek writes.

Rusnok will also have to complete his knowledge of the stormy and complex developments in the area of preparation for the European banking union, Machacek writes.

He adds that these are key problems and that it takes one full job to comprehend them.

Machacek writes that it is also noteworthy that no woman will be sitting on the CNB Board after Zamrazilova´s departure, but adds that Klaus´s criticism of that Zamrazilova´s mandate was not extended is ridiculous.

Machacek recalls that Klaus took the same attitude to Michaela Erbenova whose CNB mandate he did not extend and even did not talk about this to her.

It is not true that there are no Czech female economists who would make dignified members of the CNB Board, Machacek writes.

He writes that Katerina Smidkova is an excellent member of the CNB team, Zuzana Smidova works with the Organisation for Economic Cooperation and Development (OECD), the above Erbenova is sitting on the International Monetary Fund, for instance.

Besides, not only Czechs need hold positions in the banking system. The Bank of England is headed by a Canadian, Machcek writes.

Returning to the introduction of the euro, Machacek writes thht the diversity of opinions on the euro and the gender diversity are not the sole welcome diversities.

An ideal CNB Bank Board should include academicians, bankers, supervision specialists and people who have had an opportunity to professionally rise within the institution. Now, the way to these changes is open, Machacek writes.

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