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Governor Miroslav Singer in London

On 29-30 June 2011 the Czech National Bank Governor Miroslav Singer visited London. He participated in the World Banking Summit as a speaker and later held talks in the Reform Club and at the Czech Embassy.

Governor Singer was invited to speak at the World Banking Summit in the session titled Growth Models for the Future, chaired by prof Lord Desai, Chairman of the OMFIF Advisory Board.

OMFIF (Official Monetary and Financial Institutions Forum), the co-organiser of the summit, invited Mr Singer to hold a talk with Q&A in the Reform Club in London. This talk was a part of the OMFIF Golden Series on World Money. The Czech Ambassador Michael Žantovský attended the event.

Governor´s speech was titled The Czech Republic outside EMU: a success story with the undertitle A Czech View on Resolving the Euro Crisis. He asked provocatively whether the lessons of the Bretton Wood collapse in 1971, which were learned two decades ago in the Czech economy, are now waiting to be re-learned in the euro area.

He sketched out how the Czech economy has been boosted by the appreciation of the Czech koruna, why interest rates are now bellow euro area levels and how the Czech Republic has now become a creditor country. Governor Singer believes resolving the euro crisis has been hindered by faulty rules, numerous policy U-turns, and illusions about the impact of euro membership.

He said: „... On many levels, including the level of European institutions, the crisis was caused by incoherent and/or insincere communication, which increased the uncertainty of market participants in the broad sense. Our country´s history tells us that a generally predicted loss of  currency fix has much lower costs (including political ones) than an unexpected one. If eurozone countries and EU institutions opt for „safe“ Greek membership in the eurozone, they must present a solution that is broad, generous and general enough to convince the markets of its credibility.

This solution had better come fast, though, as muddling through has significant economic costs and increases the risk dramatically. In the meantime, the authorities should at least avoid communication that increases the risk of a run on banks and of angering the voters of fiscally sounder eurozone states. Last, but not least, a plan B would be highly desirable. ...“

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Guverner Singer v Londyne 062011