- Finance Minister Pavel Mertlík , his deputy, Jan Mládek, and NPF head Jiří Havel announced their resignations on Tuesday. Mertlík, who was also Deputy Prime Minister in the cabinet of Miloš Zeman, stepped down protesting his lack of influence on some key government decisions, namely in the area of privatization. Jiří Havel follows Mr. Mertlík immediately, while Mr. Mládek, the deputy responsible for privatization at the MoF, said he was quitting on May 31. Mertlík´s resignation is likely to bring a delay in privatization and fiscal reforms. President Václav Havel said he knew nothing official about the resignation of Mertlík, not having spoken to him or Zeman. "But if this is confirmed, I do not regard it as good," quoted Reuters Mr. Havel. Also ČNB Governor Zdeněk Tůma regretted the resignation and appreciated both professional performance and moral standards of Mr. Mertlík. Mertlík's latest political defeat came on Monday when the cabinet asked him to cancel tenders for selecting privatization advisers for electricity and natural gas sell-offs. Mertlík has been since several months at odds with Industry and Trade Minister Miroslav Grégr over Grégr´s “Big Bang” plan to stimulate the economy. Many politicians from ODS and ČSSD criticized Mertlík´s role in the controversial affair of IPB takeover by ČSOB.
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Industrial output rose 6.5 % year-on-year in February, after a 13.8 % increase in the previous month. Manufacturing grew faster than the average (+7.5 %). Industrial sales outpaced industrial output slightly, with a 7.5 % growth rate. Labor productivity in industry rose 6.1 % year-on-year, faster than average nominal wage (+5.3 %).
- ČNB announced on Tuesday that Czech
foreign debt amounted to CZK 814bn by the end of 2000Q4. A year ago, the debt was CZK 823bn. Also the structure of the debt changed: the share of long-term liabilities fell from 62 % to 58 %. Net investment position of the Czech Republic worsened from CZK –111bn by the end of 1999 to CZK – 169bn by the end of the last year.
- The
resignation of Pavel Mertlík and other key privatization officials
hit Czech equities on Tuesday but the market still managed to close higher on gains to telecoms issues. PX50 rose 0.8 %, mainly on the back of rising Český Telecom shares (+3.4 %). ČEZ lost 4.9 % in the aftermath of Monday’s cabinet decision to prepare the cancellation of tenders to pick advisers on the sales of power and gas firms.
- The
Czech crown experienced a busy morning on Tuesday followed by calmer afternoon trading, after the finance minister and two key sell-off officials resigned. CZK briefly dipped to a one-month low of 34.83 to EUR from 34.68 earlier in the day, but later recovered to 34.77/80 and steadied around that level. CZK was supported by numerous long positions in EUR, so there were no further large purchases. Against USD, CZK fell from 38.38/40 late on Monday to 39.12/15 late on Tuesday.
- Resignation of Pavel Mertlík and his two close work-fellows spurred a wave of sell-offs at the
bond market. Industrial growth figures announced early on Tuesday or announcement of a new inflation target by ČNB found, on the contrary, negligible echo.
| late April 10 | bond yield | late April 9 |
| CZK/EUR | 34.78/81 | - | 34.59/62 |
| CZK/USD | 39.12/15 | - | 38.38/40 |
| State 6.75/05 | 104.38/68 | 5.45/36 | 104.58/88 |
| State 6.95/16 | 106.55/85 | 6.25/22 | 107.40/70 |
(Martin Kupka)