The European Commission yesterday reported on candidate’s readiness to join the EU. The commission said that enlargement negotiations with the Czech Republic and nine other candidate countries toward EU accession in 2004 are nearing completion. In its report, the EC describes the Czech Republic as a functional market economy; nevertheless, it called for certain reforms in public finances. Of relevance for domestic equities, the EC report called for increased transparency in the banking sector, improvement in the VAT and excise tax systems, progress in liberalizing the telecommunication sector, and for the greater independence of the sector regulator.
The report was positive, and its content was in line with expectations; therefore, it had little impact on the domestic capital markets.
The next EU-enlargement-related event is the Irish referendum on the Nice Treaty, the aim of which is to overhaul European Union institutions in preparation for expansion, an important prerequisite of EU enlargement. The referendum takes place on October 19.
Jiri Soustruznik