Grzegorz Kolodko becomes new Finance Minister amid some concern

In line with expectations, Grzegorz Kolodko has been chosen as the new Finance Minister. He is seen as a controversial figure by some analysts and foreign exchange markets, which led the currency to further weaken to zl. 4.18 against the US dollar and zl. 4.07 against the euro. Analysts fear that Kolodko might increase budget spending, and so turn away from his pred ecessor's attempts to curb the growth of expenditure. They also stress, that his difficult uncompromising character could lead to further tensions in the rift between the government and the Monetary Policy Council. "Unlike [his predecessor] Marek Belka, Kolodko will seek to manage the whole economy," says Janusz Jankowiak, chief economist of BRE Bank. Perhaps the biggest fears are associated with Kolodko's recent proposal to devaluate the zloty by 15% and introduce a currency board system. "Such a move, together with increasing the budget deficit, is a recipe for an Argentine-type crisis," said West LB bank economist, Jan Winiecki. However, Prime Minister Leszek Miller denied that his government would devaluate the currency. (Rzecz pospolita, July 6-7, p. A3) T.J.