Poland's Monetary Policy Council cut interest rates a sixth time this year. The central bank cut the 28-day intervention rate by 1.5 percentage point to 11.5 percent and the Lombard and discount rates by the same amount. The Central bank and government are under pressure to stave off a shrinking economy that slowed inflation, but caused joblessness to soar. Inflation recently fell to 4.0 percent from 9.3 percent a year ago.
Czech negotiators in Brussels successfully close a chapter concerning taxes. EU permitted three temporary relieves and two permanent alleviations. The households heating VAT should be adjust to EU level by the end of 2007 as well as construction works VAT and tobacco excise tax. Small distilleries acquired a permanent alleviation from excise tax and self-employed entrepreneurs with an annual profit lower than CZK 1.2 mil. should be relieved from VAT.
Cesky Telecom and Atlantic West unsuccessfully ended talks on a takeover of 49 per cent of mobile carrier Eurotel. This could be an obstacle in privatization of the state share in Cesky Telecom. Current contracts ensure a managerial control of Atlantic West in Eurotel. However, privatization is likely to begin. A strategic investor should be selected by the end of March 2002.
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