Tim Gosling and Nicholas Watson in Prague
A bribery and spying scandal that exploded onto television screens last week in a series of police raids on the prime minister’s office and other ministries has forced Czech premier Petr Necas to resign, in a move which will automatically bring down his government.
The resignation leaves his party and its partners scrambling to form a new centre-right coalition administration. But with the new leftist President Milos Zeman in office and an opposition riding high in the polls, early elections look increasingly likely. Continue reading »
Central Europe’s recent floods looked dreadful on television. And they will have scarred the memories of the people who were hit the hardest. But the economic effects will be limited thanks to the solid defences put in place since the last flood a decade ago.
So says Erste Bank, which argues that while the floods were similar in scale to those of 2002, the costs for Austria, the Czech Republic, Slovakia and Hungary, will be a small fraction of 2002′s €6bn. Continue reading »
By Nicholas Watson of bne
The Czech Republic was thrown into political crisis on Thursday after the police’s organised crime unit raided government offices, including the cabinet office, the defence ministry and the agriculture ministry.
Interior Minister Jan Kubice made a statement to parliament saying that the head of the police unit and two prosecutors visited Prime Minister Petr Necas (pictured) “in relation to a criminal procedure.” Officials later said several people had been detained. Necas later insisted that neither he nor any of his close aides had done anything wrong, and that he would not be resigning.
Continue reading »
At least on the surface the Czech GDP figures for the first quarter confirmed the bad news – it was the worst quarter since 2009 and a poor performance compared to other economies in the CEE region.
The Czech Statistical Office said GDP fell 2.2 per cent year-on-year and by 1.1 per cent compared to the previous quarter. The result was worse than estimate of a 1.9 per cent annual contraction released last month. Continue reading »
The Czech authorities have declared a national emergency following days of heavy rains that have left up to five people dead and several towns in the south and west of the country under water.
A rising tide of milky-coffee-coloured water in the River Vltava is threatening to spill over into the historic centre of the capital Prague and tourism officials are already beginning to estimate the potential losses to a washed out season. Continue reading »
By Adam Easton
Polish manufacturing remained in contraction for the fourteenth month running but there were signs on Monday the downturn is easing as new orders, output and employment all fell at slower rates.
May’s purchasing managers index, compiled by Markit Economics for HSBC, edged up to 48.0 from 46.9 in April. PMI figures of less than 50 denote a contraction of manufacturing. Continue reading »
By Nicholas Watson of bne
The Czech prime minister assured his Russian counterpart on May 27 that the process for choosing the winner of the country’s nuclear tender would be fair and transparent. Yet a growing split in the cabinet, a continuing stand-off with France’s Areva after it was ejected from the tender, and now sources saying CEZ is asking the remaining bidders to finance the €8bn-12bn nuclear expansion, have all cast further doubt on the project. Continue reading »
Normally, when a country’s president weighs in on a potential merger of national stock exchanges, the response is enthusiastic.
But the unexpected backing by the Czech Republic’s Milos Zeman for a merger of the Prague and Warsaw stock exchanges has instead sown confusion into central European capital markets. Continue reading »
A note from Capital Economics on Friday suggests the economies of central and eastern Europe may finally be emerging into the light.
Or at least its title does (Emerging Europe: Slump in regional growth may be bottoming out). Its message, though, is that while recent GDP figures may have given grounds for that kind of hope, growth is extremely weak and any recovery is likely to be sluggish and uneven. Continue reading »
By Nicholas Watson of bne
When the new chairman of Czech coal miner New World Resources warned back in February that the first part of 2013 was going to be challenging, few probably envisaged it would be quite as bad as this. But on May 16, NWR revealed that it made another record loss in the first quarter and said it would take a series of measures worth €100m to bolster its finances. Continue reading »
The Czech Republic is in a terrible downturn that shows no sign of coming to an end with new flash GDP data showing a first quarter annual contraction of 1.9 per cent, much worse than analysts had predicted and the Czech economy’s worst performance since the depths of the first wave of the crisis in 2009. Continue reading »
Bad GDP figures from the eurozone on Wednesday but there’s a pleasant surprise from an unexpected quarter: Hungary’s economy contracted by only 0.9 percent in annual terms in the first three months.
Doesn’t sound like good news. But investors had been expecting a drop of as much as 1.4 per cent. With hopes of further improvement in the rest of 2013 buoying the Budapest market, the forint gained 1 per cent against the euro. Continue reading »
Terrible news out of Poland on Thursday morning as Polish manufacturing showed signs of a steepening downturn, posting the worst results since the depths of the first wave of the economic crisis in 2009.
April’s purchasing managers index, compiled by Markit Economics for HSBC, hit 46.9, far below analysts’ expectations of 47.8 and the worst since July 2009. PMI figures of less than 50 denote a contraction of manufacturing, and Poland has been posting them for 13 successive months, the grimmest performance in a decade. Continue reading »
The global battle between Austerians and Spendanigans has opened a front in central Europe and the Spendanigans appear to be gaining ground.
In an interview with the FT, Robert Fico, the centre-left prime minister of Slovakia, came down firmly on the side of encouraging growth and concentrating less on belt-tightening. Continue reading »
Poland and the Czech Republic seem to be heading in different directions over the euro.
The Czech Republic has long been one of the region’s greatest sceptics on joining the common currency, preferring to hang on to the koruna and enjoy a reputation for fiscal and monetary probity at least equal to that of the EU and the European Central Bank.
Czech governments have for years refused to set a firm date for entry. But now Milos Zeman, the country’s new centre-left president, said in a German press interview that his country could be in the euro by 2018 – a marked departure from the eurosceptic views of his predecessor Vaclav Klaus, who famously even refused to fly the EU’s blue banner over his residence. Continue reading »