Czech Prime Minister resigns

Yet another scandal in the Czech Republic and it comes at a difficult time as the country's economy is rather shaky. Well, whose isn't? The eurozone is its biggest market and the eurozone is not doing terribly well. According to the Wall Street Journal [you can get round the pay wall by putting the title of the article into Google]

Prime Minister Petr Necas, who has been in office three years, handed in his resignation to President Milos Zeman days after his chief of staff, Jana Nagyova, was arrested on criminal charges, including allegedly ordering military intelligence to spy on Mr. Necas's wife.

Election is due next year and the President seems to have decided to wait for the right time and to appoint an interim Prime Minister. In the meantime he has asked Mr Necas to carry on as acting Prime Minister. The chances are that it will be a member of the Civic Democratic Party who will be asked to form the government.

So what is the scandal about this time? Largely about an abuse-of-power enquiry that involves Mr Necas's Chief of Staff, Jana Nagyova.

Ms. Nagyova was charged with abuse of power in connection with what prosecutors said was an unsanctioned use of the country's military-intelligence agency. She appeared in court on Saturday and was ordered held in custody as the investigation continues.

Prosecutors said she also allegedly helped bribe three ruling-party lawmakers—who were also arrested—to drop their rebellion against Mr. Necas in Parliament last year in exchange for jobs in state-run companies.

Her lawyer, Eduard Bruna, said she denied all the charges. He said Ms. Nagyova had sought to protect Radka Necasova, the prime minister's wife, and others from potential security threats, allegedly involving attempts by members of Jehovah's Witnesses, a Christian denomination, to contact Ms. Necasova.

Jehovah's Witnesses? I know they can be something of a nuisance but a security threat? Really, Ms Nagyova ought to have been sacked long ago for complete lack of imagination. Dariusz Kałan gives the background to the latest manifestation of Czech power politics in EUObserver. I shall give him the benefit of the doubt and assume that he was not the one to come up with that daft headline: Czech Watergate: All the Prime Minister's Women.

A political earthquake struck the Czech republic on Thursday night (13 June) directly after Prime Minister Petr Necas' cabinet meeting.

Following raids on government and company offices across the country, police detained seven people, including senior MPs in the ruling Civic Democratic Party (ODS), top military intelligence officers Jana Nagyova, the PM's chief of staff and long-term personal assistant.

They also seized the equivalent of nearly €6 million in cash and several kilos of gold.

The article suggests that the best of the story is yet to come though, for the time being, Mr Necas himself is seen as "weak and wobbly" but fundamentally honest. Nevertheless, he seems to be in the midst of an acrimonious divorce and his Chief of Staff (and alleged lover) is being accused of using military intelligence to spy on his wife (in order to protect her .... see above). President Zeman, in the meantime, has been attending official ceremonies while being visibly drunk, so he has the odd PR problem or two. (Though his drinking habits are not exactly news, as this blog has mentioned before.)

Dariusz Kałan suggests an interesting scenario, which should excite people outside the Czech Republic though not, perhaps, inside it:

Only his [President Zeman's] predecessor, the 72-year-old Vaclav Klaus, who continues to cling to political ambitions despite his advanced age and unpopularity, might get a bump.

Since stepping down from office, he has been waiting for an opportunity to take back leadership of the ODS, the party which he founded.

The ODS rank and file might well see the Cold-War-era hero as the only person capable of restoring the group's credibility.

But for Czech people at large, this will have little meaning.

None of this would matter too much if it were not for the fact, which cannot be repeated often enough, that the Prime Minister of the Czech Republic is also a member of our real government.

What's in a name?

Should one refer to banking privacy or banking secrecy? One sounds rather attractive, the other evil, anti-communitarian, defiant and generally a bad thing. That is, of course, why the Swiss banking rules about clients' privacy are consistently described as banking secrecy, particularly when the industry and the country is being bullied by the United States and probably quite soon the European Union in the name of its members, who feel that people should not try to take money out of the various governments' rapacious hands.

For the time being, the Swiss are holding out and one cannot help wondering whether recent scandals around certain US institutions, such as the IRS, have not stiffened their resolve.

The news is that the lower house of the Swiss Parliament has "refused to debate a bill that would allow Swiss banks to pass client information to the US tax authorities". The Bill will now return to the Senate who had reluctantly passed it, after threats from the US that it "would indict Swiss banks, and possibly even cut them off from the dollar market" if its parliament disobeys instructions. The Swiss parliament will be rising this week for summer, so the Bill will not be discussed till the next session. If the lower house refuses to debate it again, it will die an unnatural death.

What then?

In January Switzerland's oldest private bank, Wegelin, closed after being indicted and fined $58m by the US authorities after admitting in court to helping American customers to hide more than $1.2bn from the Internal Revenue Service.

In 2009, Swiss bank UBS paid $780 million and handed over details of more than 4,000 accounts in order to avoid indictment.

That would be the Internal Revenue Service that is waging a losing fight to clear its own name and for whose abolition there are ever more calls in the United States. Let us not forget the European Union that is standing in the shadows, hoping to get a piece of the action.

It's show time

One of my favourites: Fred Astaire and Judy Garland singing and dancing about the Midnight Choo-Choo that leaves for Alabam:

Will this solve our problems?

The most recent story of MPs and, possibly, Peers (who are denying the accusations) asking questions after some money had been promised or even handed over (the stories are somewhat muddled) with Parliamentary passes being withdrawn from lobbyists by the Speaker is even more bizarre than its predecessors.

As Eamonn Butler of the Adam Smith Institute put it in his e-mail to all subscribers this morning:

Journalists trapped parliamentarians in a cash-for-influence sting. So now we're going to have a clampdown on lobbying. (Although no lobbyists were involved. Now you know how laws are made in this country.)

Quite so. This was not an example of our courageous boys and girls of the press investigating the wrong doings of our legislators but a case of said hacks and hackettes setting up a sting operation or, if you prefer, being agents provocateurs. Naturally, those being provoked by the agents should not yield to temptation but the whole story has more than a whiff of fishiness.

The government has been wanting to regulate lobbyists for some time though nobody has yet been able to demonstrate that any sort of a register or regulatory body would make the system more honest or acceptable.

The Adam Smith Institute blog summed matters up:

We have seen the result in the United States. Think-tanks carry on as before, but they have to set up a separate 'lobbyist' body comprising any of their personnel who have frequent discussions with folk on Capitol Hill. The effect is to politicise think-tanks and put a wall between their independent policy experts and the politicians. An issue comes up, a think-tank expert has important things to say, but cannot say them directly to the policymakers.

But it does give an opening to yet more bureaucratic meddling with the political process.

The government has experienced certain difficulties in passing legislation that would create new rules through Parliament. Now, if you please, we have a synthetically manufactured scandal that does not involve lobbyists but is being presented, very conveniently for the government, as an excellent reason for passing new legislation. The timing raises some questions.

Latvia is joining the eurozone

Despite obvious misgivings on the part of the population, Latvia is set to become the eighteenth member of the eurozone.

In a report, the Commission confirmed that the Baltic state had met the criteria for joining the single currency.

Officials hope the news will show the eurozone is set to grow despite a three-year sovereign debt crisis.

Latvia is keen to strengthen ties with western Europe and reduce its dependency on Russia.

One can understand why Latvia would want to reduce dependency on Russia (something the East European and Baltic states have been trying to achieve since the early nineties with variable success) but the notion that the crisis will somehow magically disappear because another country clambers onto the sinking ship seems rather doubtful.

There will be a new member in our real government

Croatia is on her way into the EU, despite the obvious problems some of the existing member states in Eastern Europe and the Balkans are having to deal with. Naturally, one of that country's representatives will be a member of our real government, to wit the Commission. Croatia will be given the Consumer Protection portfolio and discussions are going on as to who in particular should hold it.

The country's nominee is Neven Mimica, currently Deputy Prime Minister for Foreign Affairs and European Integration and a reputedly tough negotiator (though what exactly he has managed to negotiate for his country beyond accession to a wobbly enterprise is unclear). However, he made a poor impression on the MEPs who questioned him for three hours yesterday.

He pledged to focus on enforcing current legislation, seeking earlier and deeper involvement of stakeholders in the legislative process, and consolidating the legal framework of European consumer policy.

The centre-right European People’s Party (EPP), the largest political group in Parliament, labelled his answers “too vague”, demanding a follow up.

“Neven Mimica has proven to be a serious person but he must catch up with the [Parliament’s] claim for the enforcement of concrete EU laws. Before being confirmed as a European Commissioner he must respond more concretely to MEPs’ questions,” said German MEP Andreas Schwab, EPP member of the Parliament's internal market and consumer protection committee.

Mr Mimica, on the other hand, thought it all went rather well.

Latvians show reluctance to join the euro

The Wall Street Journal thinks this reflects "Ambiguity Over Euro":

Political parties in Latvia skeptical of joining the euro zone next year took the bulk of the votes in the capital in local elections Saturday, heightening the view that many here still don't support joining the bloc.

I'd say it reflects some reluctance on the part of the people of Riga (likely to be the most pro-euro part of the contry) to join a problematic currency union. Never mind, says the article.

Still, the elections, held to select members of 119 municipal councils across Latvia—including the 60 members of Riga's city council—aren't expected to derail Latvia's planned adoption of the euro in January. The European Commission is expected this week to green light the small Baltic nation's entry into the euro zone.

Quite so. Why should votes and elections matter?