NBS fed up with empty seat

THE NATIONAL Bank of Slovakia (NBS) has been without a vice-governor for monetary policy for more than eight months, and is getting increasingly restless.

THE NATIONAL Bank of Slovakia (NBS) has been without a vice-governor for monetary policy for more than eight months, and is getting increasingly restless.

The central bank, supported by economic analysts, does not consider the vacancy a good sign at a time when the country is preparing for euro adoption. As NBS Governor Ivan Šramko told the Sme daily, "the delay is very negative. It's taking too long."

After the previous vice-governor, Elena Kohútiková, left office on March 27, the central bank said on several occasions that it would welcome the appointment of a new vice-governor as soon as possible.

"The post of vice-governor is very important, mainly with regards to the complex tasks involved in meeting the conditions for euro adoption," NBS spokesman Igor Barát said.

The NBS vice-governor is nominated by the government, approved by the parliament, and installed by the country's president. In mid-October, PM Robert Fico promised to put forward a candidate within two to four weeks, but failed to do so.

The PM's spokesperson, Silvia Glendová, said the prime minister does not want to rush the selection because the cabinet takes the process of euro adoption, which will be the responsibility of the new vice-governor, very seriously.

The NBS currently is sharing the responsibilities of the vice-governorship among other members of the Bank Council. "It [the problem] should be being dealt with intensively. Such management improvisations, if they last for too long, have negative consequences," Šramko said.

The governor said there were several people currently on the Bank Council who could do the job. "I said on several occasions that we have enough suitable people there," Šramko said.

To make matters worse, since December 1 the Bank Council has also been short another member, when Karol Mrva ended his first term. Šramko has already sent the government a proposal that Mrva be nominated for a second term to, but the cabinet has not yet put the proposal on its agenda.

Viliam Pätoprstý, an analyst with Unibanka, agreed that the vice-governor for monetary policy is a vital post. "It's a key position not only for the central bank but also for the financial markets," he told The Slovak Spectator.

"If the post is unoccupied, it increases uncertainty on the markets, and most of all encourages speculation as to why someone would be interested in creating these delays. It's an especially sensitive issue at a time when Slovakia is preparing for the euro, when setting monetary conditions is an absolutely crucial step in trying to meet the Maastricht criteria for the adoption," Pätoprstý added.

On the other hand, Robert Prega, an analyst with Tatra banka, said that while it would definitely be better if a vice-governor were appointed, the situation should not be blown out of proportion.

"Experience teaches us that these personnel changes on the Bank Council always take a long time. It has become the rule that the Bank Council is incomplete, rather than an exception.

"It would certainly be better to have a vice-governor, especially when we are about to enter the decisive stage before accession to the EMU. However, the powers [of the vice-governor] have been shifted to other members of the Bank Council and NBS management," Prega said.

The Tatra banka analyst says he was confident that euro-related tasks were being handled professionally by the other members of the Council and that the adoption process was in no danger. "I also think that the unoccupied vice-governorship is no more a source of speculation than was the refusal of the president to install the first candidate, Vladimír Tvaroška," he said.

The previous Mikuláš Dzurinda cabinet nominated Tvaroška, 34, who was at that time deputy finance minister, to the post of vice-governor, and had the selection approved by parliament in March 2006. His inauguration seemed a remaining formality.

However, President Ivan Gašparovič said Tvaroška did not have the required five years of experience in a management, scientific, or pedagogical position in the monetary field or in finance, and refused to name Tvaroška vice-governor. The president's decision was the first time in Slovakia's history that the head of state has refused to honour an appointment approved both by the cabinet and the parliament.

The Slovak media speculated that the president might have had more than just professional reasons for refusing the nomination. The then-opposition Smer party, which supported Gašparovič in his 2004 run for the presidency, was unhappy with Tvaroška's nomination, and did not support it in parliament.

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