The government agreed to use Konsolidační banka for a CZK 9.4 bil. bailout of Universal Health Insuarance (VZP). This measure was criticised as non-systematic and contributing to non-transparency of public finances.
The government also agreed to give a CZK 2bn state guarantee for bad loans at Komerční banka. This will raise the total cost of bailing out Komerční banka to CZK 77 bil. Estimated proceeds form the sale of the bank are CZK 34-45bn.
Petr Pithart (KDU) was elected as a new Senate chairman. He won 50 votes in the 81-seats Senate. The vice-chairmen will be Jan Ruml (US), Zdeněk Vojíř (ČSSD) and Přemysl Sobotka (ODS).
The Czech koruna was traded in a narrow range on Tuesday tracking USD/EUR tracking. The koruna closed at 34.73 yesterday from 34.70 on Monday. Against the dollar the koruna dipped to 39.01 from 38.85 late on Monday.
The longest state bond 6.40/10 gained 15 bps to 94.15 with yield at 7.28. The government bond 6.75/05 eased 5 bps to 99.85 yielding 6.78.
(David Marek)