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Czech Watch - 23 May 2002

23.5.2002 11:08
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Finally, the public budgets issue moves closer to the focus of politicians who will likely to be in charge of a reform. According to the ODS and Parliament chairman Vaclav Klaus, a new government will have to declare immediately a mid-term consolidation program. For the first time during his being, Klaus expressed an opinion yesterday that the consolidation of public finances would not deliver just positives.

The cabinet agreed yesterday to subsidize mortgages for existing houses. It will apply to loans of up to CZK 800ths for existing apartments and CZK 1.5mil for existing houses. The current subsidy applies only on new dwellings.

An analysis of Deloit&Touche showed a big difference between productivity in domestic owned firms and in those with foreign capital. Central European firms in domestic hands show just half the productivity of the firms managed by foreigners.

Hungarian central bank, which raised its interest rates on Tuesday, published its inflation forecasts yesterday. Prognoses for this year were increased to 5.3% from previous 4.8%. The central bank expects a drop to 3.4% for the next year. GDP forecast ranges 3.3 to 3.9% for 2002 and 3.6 to 5.0% for 2003.

Euro zone does not want Sweden to enter the union. EU Commissar Pedro Solbes said yesterday that Sweden was not prepared enough to enter the Economic Monetary Union. He criticized the excessive volatility of exchange rate and legislative, which does not provide a required rate of independence for the central bank.

Click here for the „Czech economic daily“ in .pdf format.

Radim Krejčí

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