Slovenes scrap over bank chief

The gloss attached to Slovenia as the newest member of the eurozone is only six weeks old but already it is being tarnished by a squabble over who should run its central bank.

The government’s repeated rejections of candidates suggest that the spectre of political interference in central bank independence is migrating from Poland towards south-east Europe.

The end of March marks the conclusion of the six-year term of the current governor, Mitja Gaspari, who piloted the country into the euro-zone on 1 January.

But there is still no agreement over his replacement, as Janez Drnovsek, the country’s centre-left Liberal Democrat president, who is entitled to make the appointment, is being over-ruled by the centre-right Slovene Democratic Party now in government.

The president wanted Gaspari to stay on, but after a parliamentary veto on 2 February, he has since suggested two further candidates - the most recent being Andrej Rant, the deputy governor since 1993.

The signs are that the governing coalition wants a showdown. Prime Minister Janez Jansa is threatening legal initiatives to deprive the president of his right to appoint the governor. "The majority of this coalition clearly do not want an independent governor," said Drnovsek on 20 February.

Unlike Poland, where central bank governor Leszlek Balcerowicz resisted successive populist government attempts to ease monetary policy, the issue in Slovenia is related more to personalities and political affiliations than to policies.

According to Drnovsek, "this is a desire to control numerous institutions that oversee the government itself". Analysts have been quick to warn against a widening trend towards interference in bank independence - pointing to calls from candidates in France’s presidential elections for changes in the mandate of the European Central Bank (ECB).

Hans Martens of the European Policy Centre lamented what he saw as a disturbing absence of political will in many member states to embrace structural reform and instead to call for changes in bank independence and the writ of the ECB.

A recent survey shows that more than 85% of Slovenians support their country’s adoption of the euro and have made the adaptation without any difficulty.

A fifth of respondents credited Gaspari for the euro switch.

The gloss attached to Slovenia as the newest member of the eurozone is only six weeks old but already it is being tarnished by a squabble over who should run its central bank.

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