Czech government appoints top European policy coordinator
The Czech government has given a new face and name to its policies dealing with the European Union. Aleš Chmelař, formerly the leading economist in the government office, has been appointed to the post which aims to makes sure the Czech government speaks with one voice in Brussels and has its fair share of influence shaping key decisions.
In Prague, Chmelař has helped plot some detailed and forward looking analysis of Czech economic problems, including the delicate question of why local wages are still around only a third as high as in Germany almost 25 years after the end of communism and more than a decade after EU entry. Low investment, productivity and innovation among domestic companies and high dividend outflows from foreign owned companies were pinpointed there. Chmelař steps into the somewhat cold shoes of former state secretary Tomáš Prouza who left the post at the start of March.
Chmelař has strongly supported full Czech participation in ongoing European consultations seeking to plug what are perceived to be gaps in the EU’s regulatory and institutional infrastructure through greater cooperation. But the Czech Republic often has had a weak and hesitant voice in some of these forums, being outside the single currency Eurozone and other initiatives, such as the European Banking Union – a move to shift supervision from nationally central banks to the European Central Bank with consistent rules for all. All euro using countries are automatically members and other countries in the euro waiting room, such as the Czech Republic, can join. Prague has not taken such a step.
Chmelař admitted at the conference that signing up to the banking union for the Czech Republic is a hard sell at the moment with more burdens than benefits:
ʺIf you are not in the euro zone and yet in the banking union you will not have access to the backstop, to the ESM [European Stability Mechanism] or to other mechanism which could motivate you to be part of the system. Therefore your motivation to accept the stick, to accept harmonization of, let’s say politically salient rules, can be very reduced. And this is one reason why the Czech Republic and other member states have not joined the banking union despite the possibility of this. We will be joining with the stick but with the potential carrot in the future. This is something that even though you can rationally measure that it could work out, that the stick is not too hard to swallow, you will still be in a situation where you are doing something for, at the moment, nothing. "