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Czech Republic: Banker Steps Into Premier Position

  • Breffni O'Rourke

Prague, 17 December 1997 (RFE/RL) -- The Czech Republic's new prime minister designate, Josef Tosovsky, has the reputation of being a strong and determined man, just like his predecessor Vaclav Klaus. But the two are dissimilar in that Tosovsky shuns publicity and lacks the headstrong arrogance that many felt marked Klaus in office.

More basically, they differ also in that Klaus is a thoroughly political creature while Tosovsky, the head of the central bank through the post-communist era, is a technocrat without political experience.

State President Vaclav Havel asked Tosovsky to take the premiership on Tuesday (Dec. 16), and his formal appointment came on Wednesday. Havel noted that as a non-partisan figure to lead what will likely be an interim government, Tosovsky has the support of the main parties of center, right and left in the Czech parliament.

As Governor of the National Bank since 1989, Tosovsky has had a powerful role in shaping what was initially seen as the Czech economic miracle. Later, when that miracle began to fade, Klaus the politician was blamed for errors in political and economic policy, while Tosovsky, the independent central banker, suffered no loss to his reputation.

Havel's appointment of a respected non-partisan figure can be seen as a move to calm the country's frayed nerves following the collapse of Klaus's three-party governing coalition almost three weeks ago. Prague-based economic analyst Radomir Jac, of Woods investment brokers, says Tosovsky's appointment sends a positive signal of steadiness and continuity to both international and domestic investors.

But Jac questions whether the move brings any real change for the better to the Czech political scene. That's because even if Tosovsky manages to put together a government in the next few weeks, no-one expects it to last beyond six months. The next scheduled elections are in 2000, but the main Social Democrat opposition says it won't throw support behind Tosovsky unless early elections are held in 1998.

Certainly the country is in the doldrums economically, and until a strong government takes office the situation can hardly improve. Figures just released show that in the third quarter of this year, economic growth slowed to a miserly 0.8 percent, giving just over one percent growth for the year overall. This is the worst growth rate in Central Europe. In addition, key areas like privatization, already in disarray, will be stalled in the short term. And foreign investors, though they may view Tosovsky's appointment benignly, will not be tempted back in large numbers until real political stability is in sight.

A major question mark hangs over the intentions of Klaus's Civic Democratic Party (ODS), the main partner in the outgoing coalition. Klaus has said he prefers the ODS to go into opposition, presumably to bide out the time until the elections, which might open the road for him to return to power.

Klaus won re-election as party chairman by a wide margin last weekend, beating off a challenge by party members disenchanted with his autocratic style and with the thickening allegations of irregularities in party funding. Immediately after his re-election, Klaus said he considered the controversy over funding to be closed. He thereby sidestepped allegations about slush funds and a secret party bank account in Switzerland.

Despite his solid win inside the party, a split in ODS ranks remains a possibility, as members of the anti-Klaus faction see their career opportunities in the party evaporate.

Klaus has not been driven from the Czech political stage, despite the rising tide of opposition to him inside and outside his party. He has proved to be a tough political survivor, but most people feel his star is waning, at least as a future national leader.

For his part, Tosovsky is about to leave the cool and measured world of the professional banker for the rougher and messier life of politics. If he can lead the country though the coming period without major upsets, he will have achieved at least something.