Identifier | Created | Classification | Origin |
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07PRAGUE978 | 2007-08-27 05:40:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Prague |
VZCZCXRO0442 OO RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG DE RUEHPG #0978/01 2390540 ZNR UUUUU ZZH O 270540Z AUG 07 FM AMEMBASSY PRAGUE TO RUEHC/SECSTATE WASHDC IMMEDIATE 9530 INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE RUEAIIA/CIA WASHDC RUEATRS/DEPT OF TREASURY WASHDC |
UNCLAS SECTION 01 OF 02 PRAGUE 000978 |
1. (SBU) SUMMARY AND COMMENT: Russia's surprise nomination of former Czech central bank governor and former Prime Minister Josef Tosovsky as IMF Managing Director has received much attention in Czech media, mostly in the form of negative and cynical commentary about Tosovsky's checkered past and Russian motivations for the nomination. While no one questions Tosovsky's qualifications for the job, the nomination has revived old suspicions based on Tosovsky's Communist Party membership, widely rumored (and denied) connections to the secret police (STB), and his possible involvement in "tunneling" (privatization schemes resulting in asset stripping). According to open STB files, Tosovsky worked on "economic information only" in his previous capacity as advisor to the central bank governor but never reported on individual persons. Other than his Communist Party connections, Tosovsky's current connections to Russia remain unclear. Likewise, there is no consensus here on Russia's motives for this move. The Czech government position is clear: they will not break ranks with the EU and will support the EU candidate, Strauss-Kahn. END SUMMARY AND COMMENT. -------------------------- NEGATIVE AND CYNICAL REACTIONS -------------------------- 2. (SBU) Czech politicians and the media appear to have been genuinely surprised with Russia's decision to nominate Tosovsky for the IMF post. Most official comments made clear that the Czechs did not appreciate being put in the difficult position of having to choose between the EU candidate and a countryman. But the government quickly stated that they would not break consensus and that Strauss-Kahn remained their choice for the position. The comments of government officials have been, at best, strained. Thus far, the only truly supportive reaction to the nomination came from former President Vaclav Havel (who tapped Tosovsky to head a caretaker government in 1998). An editorial in the leading mainstream daily paper (Mlada Fronta Dnes) highlights Tosovsky's qualifications, describing him as a first-class candidate who may be better qualified than the current EU candidate from France given his respect within financial markets and strong reputation among central banks. The journalist (Pavel Paral) says that for Tosovsky to have a chance, he will need USG support and the U.S. has not yet given its position. Paral also states this would be a great opportunity for the U.S. to "take revenge" for the European countries bringing down Paul Wolfowitz as World Bank president with a "fabricated scandal." 3. (SBU) While President Klaus has thus far refrained from making any public statements, the fact that Havel (his nemesis) supports Tosovsky's nomination would be reason enough for him to oppose it. However, Klaus also has other reasons: he blames then-central bank governor Tosovsky for the collapse of the government Klaus led following the 1997 economic crisis. While Klaus has been silent, his people have not been. Klaus's spokesman told local journalists that the President considers the Russian nomination "strange" since it is not usual for a State to nominate a citizen of another State, but declined to speculate on Russian motivations. Klaus's Political Advisor, Ladislav Jakl, was quoted in the press as saying, "One cannot help wondering whether he (Tosovsky) did not act in the interest of a foreign power some other time already." -------------------------- THEORIES BEHIND THE NOMINATION -------------------------- 4. (SBU) There is considerable speculation in Prague about Russian motives for this nomination (accompanied by somewhat less speculation about Tosovsky was thinking in agreeing to what seems surely to be a losing proposition). The charitable view is that Russia is seeking a European candidate from a transition country to bring a new perspective to the top of the IMF, and to curry favor with large developing countries. The less charitable view is that Russia's only motive is to split the EU by trying to get the Czechs (and perhaps other "new" members) to abandon the French candidate, while possibly trying to revive the old "brotherhood." There is also no clarity on the question of whether or not the Russians are actually serious, or just trying to look like a shining international statesman (similar to his proposals for missile defense). If the Russians were serious about trying to woo at least the Czechs away from the EU, they miscalculated in choosing Tosovsky, and with their execution of the plan. Assuming they are serious, they appear to have also miscalculated by PRAGUE 00000978 002 OF 002 underestimating the tendency for Czechs to disapprove of Czechs who are either successful or highly respected abroad (e.g., Havel, Kundera, Tosovsky). -------------------------- BIOGRAPHIC INFO -------------------------- 5. (U) The bio below is from open sources and is lacking some details and does not account for every year. There are rumors that Tosovsky studied in Russia but post is not able to confirm. September 28, 1950 Born in Nachod, Czechoslovakia (Eastern Bohemia) 1973 graduated from the Prague School of Economics with a focus on foreign trade 1973 started work at the central bank (Czechoslovak State Bank, CSSB) 1976 joined the Communist Party of Czechoslovakia 1977 started working for the London branch of Zivnostenska Banka 1980 left for France to study banking 1984 - 85 Economist with London branch of Zivnostenska Banka 1986 - 99 Advisor to central bank Governor Jan Stejskal 1989 returned to London 1990 - 92 Governor of Central Bank of Czechoslovakia (CSSB) 1992 - 97 Governor of Central Bank of Czech Republic (Czech National Bank, CNB) January - July 1998 caretaker Prime Minister July 1998 - November 2000 Governor of CNB December 2000 to present Chairman of BIS Financial Stability Institute, Basel, Switzerland GRABER |