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 »
Question: What’s the link between a national airline, a global-brand ski factory and an organic flour producer?
Answer: none at all, except in Slovenia, where any half-aware citizen would immediately recognise them as state-owned companies being prepared for privatisation to raise the cash to bail out Slovenia’s heavily indebted banks and balance the national budget. Continue reading »
While the effects of the eurozone crisis have abated, economic activity is slowing faster than expected in the region’s biggest two markets – Russia and Poland. Structural reforms are needed, and needed now, says the bank. But it always says that. 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 »
Latvia hopes to become the 18th EU member state to join the eurozone. Estonia became the 17th in 2011. The FT’s Nordic and Baltic correspondent Richard Milne spoke to the President of Estonia, Toomas Hendrik Ilves, about his country’s experience in the eurozone and his advice to Latvia.
Alenka Bratušek became Slovenia’s new prime minister last week, the first female head of government of this Alpine state of 2m people. She could hardly have had a tougher start to the job, as Monday’s last-minute deal to rescue Cyprus left many wondering if Slovenia might be next in the queue for a bailout.
Slovenia needs to refinance approximately €1bn in treasury notes by June. Its banks have a hole in their combined balance sheets of about €4bn. The banks still have liquidity but it is streaming out of deposits that they are paying heftily for – about 4 per cent a year for 12-month deposits. Bratušek and her new government have a lot of work to do. Continue reading »
A vote of confidence in the euro: Latvia on Monday formally decided to join the troubled common currency, with the prime minister, finance minister and central bank governor jointly signing the application.
It might not make headlines in the ECB’s headquarters in Frankfurt. But for Riga this is big news – its most important economic decision since it joined the European Union in 2004. Continue reading »
Russia’s central bank kept its policy interest rates unchanged on Friday morning, as widely expected. But the non-event is worth noticing as it shows the Russian economy moving into its post-election phase – ie, one of slower growth. Continue reading »
Poland’s slowing economy prompted the central bank’s interest rate-stetting Monetary Policy Council on Wednesday to cut its benchmark rate by a quarter point to 4.5 per cent – the first step in what most analysts expect is the start of a longer term loosening of monetary policy.
The Polish MPC was the only central bank in the EU to increase rates earlier this year, when prospects for the Polish economy seemed a lot brighter and the big problem was persistently high inflation. Continue reading »
The crisis in the eurozone has been causing plenty of worries in Asia – particularly around the supply of credit to the region. But the bigger problem for many countries lies closer to home – in a dramatic reversal of the build up of surplus cash that has been Asia’s hallmark for the past decade.
Across the region, according to research from Morgan Stanley analysts, declining exports and strengthening domestic demand for goods produced locally and abroad are combining to cut current account surpluses. Continue reading »
So it must have been nice to get a pat on the back this week, even it if was from an unlikely source: Ricardo Martinelli, president of Panama, who told Merkel on a visit to Berlin he would like to introduce the euro as Panamanian legal tender alongside the US dollar, because he has “full confidence in the euro, full confidence in Europe.” Continue reading »
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