Czech Republic: Heavy rains paralysed and brought substantial damage to the eastern part of the Czech Republic and to Slovakia and southern Poland, and in some plants production was brought to a halt. The flooding was "the biggest catastrophe of the century" according to local authorities.

Ukraine: The Ukrainian Deputy Economy Minister, Valentyn Poshyvailo, announced that Ukraine expects to reach 30-31 million tonnes of sugar beet crop this year, a marked increase on the 24 million tonnes produced last year.

Russia: Two of Russia's biggest oil companies, Lukoil and Rosneftare, have approached the Kazahk President, Nursultan Nazarbayer, directly in an attempt to muscle in to the ongoing negotiations for exploration rights in the Caspian Sea (FT 14/7). For the last two years, seven western companies, which include Agip, BP in partnership with Statoil, British Gas, Mobil, Shell and Total in the consortium, have negotiated with Kazahk representatives. A representative of the consortium stated on 14 July that Russian participation is welcome in order to deter a challenge to its legality from the Kremlin.

According to the State Statistics Committee, the Russian economy continues a negative trend as the GDP contracted by 0.2 per cent from January to June this year (since 1991 the GDP has dropped by 39 per cent).

Russian nuclear power workers Smolensk Nuclear Power Plant declared victory when the Government promised on Thursday to pay Rbs24.8 billion (£2.63 million) of delayed wages.

Slovakia: Volkswagen of Germany, the biggest foreign investor in Slovakia, is planning to double its car production in the country to 60,000 units from 30,000 in 1996. The German carmaker started its car assembly operation in Slovakia in 1990, since then has developed its presence by producing car components and gearboxes, and will begin a production of the new front wheel drive Golf model in the autumn of this year.

Poland: Poland has called for emergency aid to fund flood relief. The Polish Government has approved the 2.5 billion zlotys (US$ 445 million) loan from the NBP, Polish central bank. The World Bank has promised a US$300 million reconstruction loan.

The Polish zloty suffered a drop of four per cent against a basket of currencies, and was fixed 1.3 per cent above the bottom of its seven per cent trading band set by the central bank. Wlodzimierz Cimoszewicz, the Polish Prime Minister, warned that continuing floods will add more pressure to the Polish economy and currency.

Russia: The Kremlin welcomed the election of Ivan Sklyarov, a pro-economic reformer as a governor of Nizhny Novgorod. The opposition parties had tried to promote their candidate, Gennady Khodyrev, but Mr Sklyarov won ten per cent more votes.

Ukraine: Nato in its bid to expand eastwards, signed a charter on co-operation and consultation with Ukraine on Wednesday in Madrid, welcomed by Ukraine`s President, Leonid Kuchma. Russia is trying to prevent the Baltic Republics being considered as the next possible members of Nato. Russian Foreign Minister, Yevgeny Primakov, stressed this position during his talks in St Petersburg with US Secretary of State, Madeleine Albright. He said: "Nato is making its biggest mistake since the Second World War by expanding into Eastern Europe."

Valery Pustovoitenko, a political pragmatist, has been confirmed as the new Prime Minister of the Ukraine, having won the majority of 226 votes. Mr Pustovoitenko promised Ukraine would stay on the track of economic reform. In his election speech, he promised to stimulate private enterprise, to reduce taxes and to diminish the size of the shadow economy, estimated at 40-60 per cent.

Czech Republic: The Czech Parliament approved a Kc11 billion fund to finance a relief programme after devastation in the eastern province of Moravia, which has been badly hit by flooding. The Government is also expected to approve the launch of a Kc5 billion bond to finance the programme as a first tranche of a US$30 million bond.

Romania: Romania plans to sell-off the first tranche of the state owned telecommunications utility, Rom Telecom. The sale is expected to value Rom Telecom at more than US$4 billion. The Government proposes to sell an initial stake of 30 per cent in Rom Telecom to a foreign strategic investor, with an additional stake between three and 55 per cent to the employees.

Russia: Alfa Bank, the banking arm of the Russian conglomerate Alfa Group and one of the top Russian banks, took steps to market its US$100 million eurobond on the international markets. The company presented its plan in London and also in east Asia. Alfa Group combines companies trading commodities like oil, tea and sugar, and also runs supermarket chains and food factories. It also deals in high-yielding Treasury bills and fine art.

The largest independent stockbroker in Moscow, Brunswick Investment, has formed a joint venture with the investment arm of Swiss Banking Corporation, SBC Warburg. The new venture will be called Brunswick Warburg.

Standard & Poor, the US credit rating agency, has assigned speculative grade credit rating to four Russian Banks: SBS-Agro, Alfa Bank, Aijba Alliance and Rossiyskiy Kredit Bank. SBS-Agro bank was rated B+, with a positive outlook.The bank issued a US$200 million eurobond recently. Three other banks were rated B with a stable outlook.

The Russian telecoms giant, Svyazinvest closed a bidding to sell a 25 per cent stake in the company, valued at US$1.18 billion. The share holding in Svyazinvest will indirectly give investors a 38 per cent stake in 85 regional telephone companies as well as in Rostelekom, the dominant international and long distance carrier. The equivalent stock market value of such share holdings is currently about US$1.4 billion.

Ukraine: Societe Generale Ukraine fund, one of the first funds dedicated to the Ukraine closed after attracting more than US$80 million. The fund is targeted to attract US$50 million.

Russia: The Swedish pulp and paper group, AssiDoman is to take a controlling stake in Segezhabumprom, Russia's biggest paper sacks company.