The European Commission (EC) reportedly asked the Czech state in mid-August for additional information regarding state aid granted to Ceska sporitelna (CS), the Czech Press Agency reported. Also, the Czech Anti-Monopoly Office (AMO) should submit a report in September regarding state aid to Komercni banka (KB). The EC has a three-month period to assess the state aid.
In fact, the EC is assessing state guarantees granted to several Czech banks, including KB and CS. Should the EC find that the effects of state guarantees (i) breach the European Union’s acquis communautaire, and (ii) are expected to persist beyond the Czech Republic's 2004 EU entry date, the guarantees would be prohibited as of the date of the Czech Republic's entry into the EU (May 2004). Moreover, lacking an EC decision at the date of the EU entry, the guarantees would be prohibited as of May 2004.
Nevertheless, we expect that the guarantees to both KB and CS will be wholly executed before the accession date. Moreover, the restructuring plan prepared by the Ministry of Finance and the AMO, which is a main precondition for the guarantees to be found consistent with the EU's acquis, has been submitted to the EC (or will be submitted in the coming days in the case of KB). At the moment, we do not expect this to be a threat to the banks' performance. Nevertheless, we watch the EC's investigation attentively.
Jan Hájek