Archive: European Union | Euro Euro
Klaus on Greek debt crisis – euro chickens coming home to roost
Uncertainty reigns in Europe as Greek leaders wait anxiously for Germany to
agree on a bailout plan for the country’s debt-laden economy. Analysts
fear if Germany’s Chancellor Angela Merkel continues to dither, the euro
could be pulled into the abyss as other debt-ridden countries such as Spain
and Portugal follow suit. But one man telling Europe ‘I told you so’ is
President Václav Klaus, who says the euro is the cause of Greek woes.
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Czech PM to announce euro adoption date November 1, 2009
Slovakia became the 16th country to join adopt the single European currency
on January 1st, and there were great scenes of celebration across the
country. Perhaps surprisingly, however, their old partner the Czech
Republic is very far from adopting the euro – the government has yet to
adopt a convergence plan. But as Rob Cameron reports, that could soon be
about to change.
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Business News
In Business News this week: as the financial crisis continues, analysts
predict lower GDP growth in the Czech Republic in 2009; a marked fall is
seen in investment in commercial property; the Czech Republic doubles bank
deposit guarantees, while the central bank begins offering loans to banks
guaranteed by government bonds; the head of the Confederation of Industry
says the government should suspend discussions about euro adoption; and big
privatisation projects are going ahead despite the financial crisis, with
Aeroflot reported to be the favourite to buy Czech Airlines.
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Strong crown sees Czech companies adopt Euro instead.
The Czech Republic’s official road to adopting the Euro is a long and
winding one. While politicians argue over the pros and cons of embracing
the pan-European currency, it seems that Czech businesses, motivated by an
increasingly strong crown have already made up their minds. Battling
against an increasingly strong crown, many companies that export beyond the
country’s borders are instead choosing to do their business in Euros. The
reasoning is simple – countries importing Czech goods, are assured a
better deal with a weaker currency like the Euro. Dominik Jun spoke to
economist Tomáš Sedláček about this issue and began by asking him why
the switch made sense to Czech businesses:
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EU expert Charles Grant: Czech reluctance to join euro incomprehensible
Charles Grant is the director of the Centre for European Reform, one of the
UK’s leading pro-EU think tanks. When we met in Prague recently, the
conversation ranged from next year’s Czech presidency of the European
Union to whether the Czechs should adopt the euro. But my first question
for Charles Grant was: what impact have the recent enlargements had on the
EU?
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Business News
In Business News this week: the budget deficit is significantly lower than
predicted; the prime minister signals an end to state support for building
savings; the euro could be adopted as late as 2019, says the governor of
the central bank; almost half the foreigners working in the Czech Republic
would like to leave, citing trouble finding employment corresponding to
their qualifications; and after years of growth, the number of mobile
phone
text messages sent on New Year’s Eve fell slightly. More
What hinders euro adoption?
The recent strong appreciation of the crown against the euro has resulted
in growing internal pressure on the Czech government to set an early target
date for euro adoption. After having to revise plans to join the Euro-zone
in 2010, the Finance Ministry has spoken of the year 2012 as a soft-target
date. However during a televised debate on Sunday the PM said the country
must now look beyond 2012 to a time when it had successfully implemented
heath and pension reforms. With neighbouring Slovakia looking set to join
the euro-zone in 2009 it seems Czechs have gone seriously wrong somewhere.
But is the country really lagging so far behind other euro contenders?
Economic analyst Tomas Sedlacek says that it is not the economy that’s
hindering adoption of the Euro – it is a lack of political will.
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European Commission criticises Czech Republic over public deficit
It came as no surprise on Wednesday but that took no edge of the news: the
European Commission's issuing of a warning to the Czech Republic for not
doing enough to rein in its public deficit. With an increase in
expenditures the Czech Republic is set this year to miss the EU's mark of
keeping the deficit below 3 percent of the GDP as part of its convergence
requirements.
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Business News
Coming up in this week's business news, Czechs help block an EU proposal to
raise tax on beer, Budvar wins a trademark battle in Portugal, Delvita
supermarkets announce they're shutting up shop, the Czech crown sets a new
record against the euro, minority shareholders call for halt in Unipetrol
privatisation, Czech perceptions of corruption decline and the World Bank
says setting up a Czech company takes 24 days - over a week longer than
the OECD average.
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Topolanek hammers nail in coffin of 2010 euro adoption
For some time successive Social Democrat governments have spoken of the
Czech Republic joining the eurozone by the end of the decade - January
1st, 2010 being the date most frequently mentioned. But the new right-wing
prime minister Mirek Topolanek put paid to the idea once and for all on
Thursday, saying 2010 was totally unrealistic.
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