IPB drama obscured by political brinkmanship

The drama surrounding the IPB bank is increasingly becoming obscured by a fierce dispute between the country's two largest political parties. The main opposition Civic Democrats have described the government's move to save the bank from collapse as daylight robbery. The whole case may also have international consequences. Vladimir Tax reports.

On Thursday, the leader of the main opposition Civic Democratic Party, Vaclav Klaus, announced in a rather dramatic statement that his party would demand a parliamentary investigation into the forced administration of IPB and its subsequent sale to CSOB. The Civic Democrats claim that the government has fallen victim to a plot orchestrated by certain financial and political circles and that the result will cost each Czech family some 25,000 crowns, about 700 dollars.

The owner of CSOB, the Belgian bank and insurance company KBC, said the acquisition was absolutely transparent and that it had agreed to the operation despite the danger of damaging its credit rating. The Czech National Bank has also rejected the Civic Democrats' allegations and suggested that they were either based on insufficient information or were intentionally misleading. Deputy Minister of Finance Jan Mladek said he was surprised by Vaclav Klaus's reaction. He said a man who had always detested the idea of parliamentary investigations was now insisting on establishing one, as if he was stricken with paranoia and had started believing in conspiracy theories. Finance Minister Pavel Mertlik reacted less emotionally, saying he would be happy to describe and explain the procedure step by step before Parliament.

The Civic Democrats' demand for an investigation has not met with much support among the other opposition parties either. Some politicians, rather cheekily, say they want an investigation of IPB's privatisation between 1993 and 1997, which was carried out by the then Klaus government. Others have questioned the Civic Democratic Party's political neutrality towards certain economic groups.

The IPB case is not only becoming a political issue, but according to observers may also threaten the country's international relations. On the one hand, the Czech Republic can rely on support from international institutions in case of a lawsuit with IPB's majority owner, Nomura, because the world financial market does not consider Nomura to be a reputable partner. The trouble, however, is that Nomura controlled IPB through the Dutch company Saluka Investments and the forceful acquisition of IPB by CSOB may be seen as a breach of the agreement on mutual protection of investment between the Czech Republic and the Netherlands.