The Prague daily Pravo reports today that the ruling Social Democrats may sacrifice Finance Minister Pavel Mertlik in order to gain support for its 2001 budget from the ODS, the center-right party that tolerates the Social Democrat’s minority government. The paper speculates that Mertlik would then move to the Czech central bank (CNB) or to the IMF. Mertlik is fairly popular in the financial markets for his privatization efforts and, most recently, for his handling of the IPB crisis in June. Although the report may turn out to be unfounded speculation, the prospect of Mertlik leaving his job would not be a good one for the markets. Specifically, his departure would introduce uncertainty regarding privatization, though much would depend on who would replace him. We expect more speculation of this kind to emerge in the coming weeks and months as the budget debate (end of August/ September) approaches.
(Ondřej Daťka)