European leaders meeting in Brussels have agreed a timetable for the creation of a single banking supervisor for the eurozone. All 6,000 banks in the eurozone would be regulated by the European Central Bank; a mechanism that would essentially create a European banking union. But several countries are extremely sceptical, and they include the Czech Republic.
The annual international conference USA and European Union Days, which took place in Prague earlier this month, focused this year among other issues on the recent European currency and budgetary crisis, as well as on the economic situation in the US. Czech Radio’s Václav Sochor spoke to two former US secretaries of the treasury under the Clinton administration, Robert Rubin and Lawrence Summers, about their views on the ongoing crisis in the Eurozone, and their country’s approach to it.
The Czech crown weakened to US dollar on Friday when it sold over 21 crowns per dollar, hitting a two year low against the US currency. The crown also fell to the single European currency, selling at over 25 crowns per euro on Friday. Analysts said the fall was triggered by gloomy news from the eurozone, particularly from Spain. In its long-term prognosis released on Friday, the Czech Finance Ministry expects the average crown to euro exchange rate to weaken to 25.30 crowns per euro this year while in the coming years, the crown should gain 1.2 percent against the euro.
An initiative by several Czech NGOs and members of the country’s business community seeks to stir up debate about the Czech Republic’s position within the European Union. The manifesto, entitled Confident Czech Republic in a strong Europe, calls on MPs and government officials to ensure that Czechs remain at the core of the EU. In this edition of Marketplace, we talk to some of its authors and signatories and looks at what impact, if any, the initiative might have on the Czech debate about the future of the European Union.
At a two-day summit in Brussels which ends on Friday, EU leaders agreed to set up a joint banking supervisory body to oversee banks in eurozone member states. They also approved a plan to boost growth in the bloc and agreed on a roadmap towards fiscal union in the euro zone. Czech officials, who initially expressed concern over proposals that the new banking authority should also supervise banks in countries outside the monetary union, seem content with the summit’s outcome.
Foreign Minister Karel Schwarzenberg told the press on Monday that he would be keeping his fingers crossed for the new Prime Minister of Greece, who he said would not have an easy job to do. Responding to the results of repeated early elections in the indebted country, Mr Schwarzenberg told the Czech Press Agency that he should rather offer his condolences. The chairman of the winning conservative party, New Democracy, met with the Greek president on Monday and agreed that a governing coalition must be established as soon as possible.
The heads of government of the Višegrad Group countries will meet in Prague on June 22 ahead of an EU summit at which the block’s leaders are expected to try to develop a road map towards fiscal union as well as debating the worsening economic situation in Spain and the outcome of elections in Greece. The Czech Republic, Poland, Hungary and Slovakia will be consulting their positions ahead of the meeting. Of the four countries, Slovakia alone has adopted the euro, but the economic problems of the eurozone are expected to impact all EU members. The Czech Republic is particularly vulnerable due to its dependence on exports most of which are destined for EU member states.
President Václav Klaus has said there is no good solution to the debt crisis in the eurozone In an interview for Czech Radio on Sunday the euro sceptic Czech head of state poured scorn on hopes that a victory of pro-EU forces in Greece –namely the conservative New Democracy party - would help resolve the country’s problems. Mr. Klaus said that no matter who wins, Greece’s ruined economy and staggering debt will remain and the country may face months of protracted agony. Mr. Klaus stressed that Greece had not precipitated the debt crisis in the eurozone but was merely its victim. He said the initial mistake had been in letting Greece join the eurozone in the first place and it was now paying the price.
In this week’s business news: the Greek ambassador to the Czech Republic has said that Greece must remain in Eurozone, the daily Lidové noviny writes that ČEZ may loose up to ten billion Czech crowns due to investments into Albania’s power grid, Russia’s oil delivery to Czech Republic is likely to fall short of target in May, the Finance Ministry is selling state bonds, and Czech Railways expands its fleet.
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