The successor to Health Minister Tomáš Julínek, Senator Daniela Filipiová, said she “would continue with reforms” prepared by her predecessor. And Minister Julínek is described by his colleagues as a good minister who just “poorly communicated” his reforms and fees to the public.
A few notes on this.
Firstly, nobody will continue with anything. No government in the world makes any reforms (that is, reforms that can hurt someone) a year and a half before elections. And by no means will reforms be made by this government, which has lost its influence and power given the fact that the “opposition” (regional governments) controls a major part of the sector.
Julínek’s reforms represented a relatively interesting and coherent system, but the trouble is that the minister did not have everything perfectly ready before the elections. If he did, he could have launched the reforms in January 2007 when the government still abounded with self-confidence. But he put the reforms together only last year (This is the problem of this government in general. Why did ODS not come up with something reasonable before the elections instead of the “thick wallets” and the “blue oportunity”? Why was Petr Nečas trained as shadow defense minister for eight years? The ODS is now paying for being lazy, sleeping, not counting and not working with experts during those eight years in opposition.)
And thirdly, Julínek’s reforms were drafted by top experts in health care financing, but the trouble is that all of his advisors also worked for some private health care business. But health care is a tough sector, similar to the world of arms trading. If you work for someone, the others want to cut your throat.
Anyway, the time that Julínek spent in office was rather longer than the post-revolution average.
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My colleague Lenka Zlámalová (HN) believes that Minister Miroslav Kalousek “for the longest time in Europe withstood pressure to launch activist interventions in the economy that pretended to be aid during the great economic crisis”. Now he has changed his stance, she says.
I think Kalousek did not resist anything. He badly underestimated the impacts of the global financial crisis – like the whole government – and started to take it seriously some time in late October. He for instance pushed through a budget based on 2008 economic growth estimates of 4.8%.
So Kalousek did not change his stance, he simply talked nonsense, did not take threats seriously, claimed that we would avoid the crisis, etc. He simply missed the point. Now finally it has begun to dawn on him, hopefully.
If that NERV (government’s national economic council) was founded in August (at the tame when the current government took over), the minister would have been told by at least some of the council members already at that time that the situation was very serious in the world and would be serious also for us.
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The Social Democrats (ČSSD) have launched a campaign calling on Czechs to buy Czech-made products. My colleague Erik Best made a good remark that in a global economy it is hard to find out what is Czech-made. Even Volkswagen Passat uses Czech components.
On top of that, such a campaign is self-destructive for an export-oriented economy. What if the Germans and other neighbours came up with a similar campaign? Or went even further – do not buy Czech products? In my opinion, nobody in Europe would launch such a silly campaign because everyone knows it would backfire in the end. But such ideas significantly devalue the reputation of the Social Democratic economic team. Was it Jiří Havel who came up with that? What would Jan Švejnar say? Or Jan Mládek or Pavel Mertlík?
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The rating agency Standard&Poors downgraded its rating for Greece. The country’s credibility as a debtor now equals the credibility of Malaysia. No disrespect to Malaysia, but Greece after all is the member of the European Union and of the euro zone. The immediate effect of the rating downgrade is that the government debt would become more costly and its financing more complicated.
Similar news – Ireland will probably need help from the International Monetary Fund and that the situation concerning Spain’s debt is not much better than the situation in Greece.
There have been more and more debates in western economic press on whether any state bankrupty is going to come, in other words, whether any country declares it is unable to settle its liabilities like Argentina did some time ago or Austria in 1873 (the Czechoslovak monetary reform in 1953 was an unspoken state bankruptcy as well). Eurosceptics are already quivering with anticipation that the threat of state bankruptcies could make debtors leave the euro zone, resulting in a collapse of the euro zone.
In his blog in The Financial Times, William Buiter points out that the opposite is likely to happen. Declaring the inability to repay debts is more of an advantage inside the euro zone than outside. Restructured debts will still have to be settled and if the said countries introduced their own currencies and devalued them sharply, then the share of debt in their state budgets would increase considerably. No one wants this and no one will allow this to happen.
