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Central bank gets new vice-governor

SLOVAKIA has finally filled a top central bank post whose 15-month vacancy worried both the National Bank of Slovakia (NBS) and market watchers.
Slovak President Ivan Gašparovič appointed Viliam Ostrožlík as the National Bank of Slovakia's vice-governor on July 11.

SLOVAKIA has finally filled a top central bank post whose 15-month vacancy worried both the National Bank of Slovakia (NBS) and market watchers.

Slovak President Ivan Gašparovič appointed Viliam Ostrožlík as the National Bank of Slovakia's vice-governor on July 11.

The president, who last March refused to appoint the candidate submitted by the government of Mikuláš Dzurinda, said that Slovakia's hopes of acceding to the eurozone make the post extraordinarily important.

Ostrožlík served on the NBS Bank Board, a supreme executive body of the bank, for four months prior to his appointment. He previously served as chairman of the board of directors and director general of Privatbanka, and also worked for Všeobecná Úverová Banka (VÚB).

"The appointment of the new vice-governor will bring no change to the central bank's monetary policies," Silvia Čechovičová, an analyst with the ČSOB bank, told The Slovak Spectator. "Mr Ostrožlík has been a member of the NBS board since March and he has already had an impact on the monetary policies."

Since the vice-governor post had been vacant for a longer time, some of the duties had to be performed by another bank board member, Peter Ševčovic, Čechovičová added.

Ostrožlík said he is aware that he is becoming the vice-governor at a crucial time, so his priority will be to assist in the preparations for joining the eurozone. Gaining the euro would bring greater economic growth and higher quality of life to Slovaks, he told the SITA newswire.

Ostrožlík's predecessor was Elena Kohútiková, whose term ended on March 27, 2006. The Dzurinda cabinet nominated then-deputy finance minister Vladimír Tvaroška, 34, to the post and parliament approved his nomination that March.

In a surprise move, Gašparovič vetoed Tvaroška. The president argued that Tvaroška did not meet the requirement of having five years of management experience in the monetary field.

What made Gašparovič's veto notable is that it was the first time the president rejected an appointment that was approved by both the cabinet and parliament.

Former finance minister Ivan Mikloš criticised the president for the move and said that Gašparovič was obliged to appoint Tvaroška.

The then-opposition Smer party was also unhappy with Tvaroška's appointment and refused to support him in parliament.

At the end of last year, NBS Governor Ivan Šramko was getting nervous about having the vice-governor post vacant for so long.

"The delay is very negative," he told the Sme daily. "It's taking too long."

Last month, a leaked memo from the European Central Bank stated that the country might have difficulties in sustaining the lower inflation rate necessary for euro adoption because it is currently supported by a combination of lower energy prices, strong currency and government pressure on energy companies' profit margins, according to the Reuters newswire.

The chief economist of ING Bank, Ján Tóth, suggested that the ECB's letter might imply that the professional dialogue between the central bank and European institutions is not strong enough.

"It might be because there is no vice-governor for euro adoption, or maybe the lack of professional capacity," Tóth told Sme.

"This is connecting two unrelated issues," the National Bank of Slovakia told The Slovak Spectator. "It is impossible to assess the quality of the dialogue from the fact that the bank has not yet filled the post of vice-governor. The national bank also has other members of the bank board and a number of experts who have been communicating with European institutions."

Juraj Kotian, chief economist of the Slovenská Sporiteľňa bank, also told The Slovak Spectator that as far as he knows, the central bank is well represented in dialogues with European institutions.

"In any case, having a vice-governor responsible for euro adoption is a valid advantage," he said.

With files from Jana Liptáková

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