In the Czech Republic the Ministry of Finance stated that, on 31 December, the budget deficit stood at 7.6bn crowns (US$221.6m), with revenues of 510.7bn crowns and expenditures of 518.3bn crowns.

According to the Estonian Ministry of Finance, the state budget revenues in 1997 surpassed the plan by 1,202m kroons ($83.5m) or 9.47 per cent. The state budget, with two supplementary budgets, was 12,698m kroons, with tax and income revenues of 13.9bn kroons.

According to a survey by the KPMG research institute on 155 companies, foreign investors in Hungary are increasingly satisfied with the present economic management in preparing the country to join the European Community.

In its latest released statistics, the Bank for International Settlements said that the Polish banks' debt, owed to commercial banks in 18 of the most economically advanced countries worldwide (G 10 and Austria, Denmark, Finland, Ireland, Luxemburg, Norway and Spain) has grown from $7bn in December 1994 to $9.25bn in mid-1997.

Following earlier discussions concerning preparation for European Union membership, Ryszard Czarnecki, Head of the European Integration Committee, declared how Poland urged the European Union to let it go ahead with its plan to slow the pace of the lowering of steel import duties to protect its domestic industry.

The implementation of the currency reform, promised by the Russian government at the end of last year, began on New Year's day. The new money, with three zeroes slashed off the old inflation, went into circulation. However, businesses and banks are still dealing with the old currency. Old notes remain valid this year and will be exchangeable until the year 2002.

In the Czech Republic the government decided to block an equity increase at Investicni a Poctovni Banka (IPB), the Republic's third largest bank. This was to prevent the Japanese investment bank, Nomura, taking control of IPB without buying the state's stake. Nomura owns five per cent of the bank, but is linked with shareholders who own another 40 per cent. In July last year Nomura agreed to buy the state's 36 per cent stake for 2bn-5.8bn crowns ($57.3m-1.5bn) and in addition to make a capital injection.

In Macedonia both the European Bank for Reconstruction and Development (EBRD) and the Macedonian Government are in final talks on the sale of a part of Makedonski Telekomunicacii (MakTel), the state owned telecommunication utility. The EBRD financed the MakTel development in 1995 with a $42.6m loan, agreeing to inject a further $50m in equity to help the company's credibility outlook for the forthcoming 1998 privatisation. MakTel is planning to move into a joint stock company prior to the the first EBRD tranche, with the second tranche planned for when the Government fulfils its commitment to a new regulatory framework for telecomms.

Furniture manufacturer, Forte SA in Poland, plans to offer two million shares to institutional investors, at the proposed price of 12-16 zloty per share ($3.5-4.7). The company's three year investment programme is estimated to cost 67m zloty ($19.7m). The company claims to hold seven per cent of the Polish furniture market with the ambition to become the main player, said the company's President, Maciej Formanowicz.

German bank, Bayerische Landesbank, plans to buy a 51 per cent stake in Polski Bank Rozwoju (PBR), by purchasing shares from existing shareholders or through a new issue. The existing shareholders, Powszchny Bank Kredytowy (PBK), which holds a 32.9 per cent stake in PBR and Citibank, are both expected to sell part of their portfolio to Bayerische.

One of the largest paper mills in Russia, the Segezha plant in Karelia, stopped production following a dispute over working capital funding between AssiDoman, the Swedish forestry group, and its Russian partners.

Several operational changes on the Warsaw Stock Exchange in Poland will take effect from 5 January, in order to make its listings more attractive and to prepare the groundwork for the WIG-20 futures trading. WSE sessions will be 30 minutes longer, ending at 3pm, while the minimum block of shares that can be sold during continuous trade will be lowered from between 3,000 to 5,000 zloty, depending on the stock ($882-1471). Eleven new share issues are planned for January, of which nine will be IPOs.

The World Bank reopened the Czech koruna sector, by launching the first Kc 3bn bond issue in three months, with ING Baring as a lead manager.

The new Czech government, selected by the Prime Minister Josef Tosovsky and sworn in by President Vaclav Havel on 2 January, met strong opposition from the leaders of the Civic Democratic Party (ODS), who claimed that they were not consulted. It is most probable that Mr Tosovsky will need to call an early election in June.

The Czech Finance Minister, Ivan Pilip, resigned from the Civic Democratic Party on 8 January following an ultimatum from Vaclav Klaus, former Prime Minister, to choose between his post as a Minister of Finance and his party membership.

The Hungarian Socialist Party completed a draft electoral programme, entitled the Economic Policy of Integration, in which the party stated that the country will maintain the 4.5 per cent growth of the GDP.

On 4 January Valdas Adamkus won the Lithuanian presidential elections with 50.5 per cent of the votes in the second round. Adamkus is a Lithuanian-American emigrant, who moved to the country three months ago after a career in the Environmental Protection Agency in the US.

By recently vetoing planned government budget amendments, Leszek Balcerowicz, the Polish Finance Minister, said that President Aleksander Kwasniewski will obstruct major social schemes planned by the Government. President Kwasniewski opposed proposed schemes such as the public service pension benefits, reconstruction works in the flood ravaged areas, student grants and the health reform.

Romania's ruling coalition was bitterly divided after the Prime Minister, Victor Ciorbea, rejected demands to reinstate Traian Basescu, a former transport minister, sacked last week. Mr Basescu accused ministers from Mr Ciorbea's National Peasants Party, the leading coalition partner, of incompetence and being too weak to take vital decisions on economic reforms. (The Financial Times)

Prague, Czechoslovakia will be the host of the fifth session of the east-west conference on 15-16 January (the Munster process). The participants will represent the G7 countries, the restructuring countries of Central and Eastern Europe and the former Soviet Republic. The first session of Munster was held in Germany in 1992, with two others in Japan and Poland. The last meeting was held in Baltimore and focused on problems obstructing private investments in Central and Eastern Europe.

Rates derive from the FT as of 2 January 1998.
Rates for Georgia, Tajikistan, Turkmenistan, Uzbekistan are provided by the national banks of each country.