Final Word from Monday, January 17, 2022

In his speech last week prior to the vote of confidence, PM Petr Fiala continued his policy of blaming the Babiš government for much of the higher cost of living. "We certainly don't deny that external factors play a role," he said, "but it is also the unfortunate result of a number of decisions of the previous government." It's not surprising that Fiala entirely exculpated the CNB, considering the way Gov. Jiří Rusnok gave the "change coalition" a boost in the election campaign by accusing Finance Min. Alena Schillerová of making incompetent statements. She and her party boss, Andrej Babiš, continue to attack the CNB for an interest-rate policy that is making banks rich and households poor. What Fiala the non-economist apparently hasn't understood is that the CNB will soon be one of the most-hated institutions in the country and that its ever-higher interest rates will make it impossible for his government to keep its promise to "deal with all the accumulated problems properly." [ Czech Republic Czech National Bank central ]