News round-up  March 1999


Czech Republic: according to the Czech Statistical Office, last month the country's trade deficit grew to 4.1 billion Czech crowns. Monika Prochazkova, Patria Finance analyst, stated that 'The figure is in line with our expectation, but both the decline of imports and exports is higher than we expected. We can see that domestic demand really is very weak, and the weakening of the crown has not been reflected in exports.'

Poland: Nicholas Stern, the leading economist of the European Bank for Reconstruction and Development (EBRD) has predicted that the country's economic growth is likely to fall by three per cent in 1999 but rise to four per cent in the year 2000. He explainedthat 'The main reason for the slowdown is a decline in external demand, which should later increase and lead to the acceleration of the economy.'

Estonia: according to the Statistical Department, last month consumer prices in Estonia grew by 0.3 per cent compared to 1.2 per cent in January. The yearly price increase in the consumer price index (CPI) stood at 3.9 per cent, while the yearly price rise of state-regulated goods and services amounted to 9.9 per cent. In one year, expenditures on education and childcare, and communications rose by 12.4 and 20.2 per cent respectively. Food and non-alcoholic drink prices decreased by 3.3 per cent at the same time.

Ukraine: the State Statistics Committee reported that in February 1999 unemployment rose to 1.08 million or four per cent of the workforce, compared to 3.8 per cent in January of the same year.


Russia: the long-term, senior, unsecured foreign currency debt ratings of AO Moscow City Telephone Network (MGTS) and AOEiE Irkutskenergo have been downgraded from Caa2 to Caa3 by Moody's. This decision was based on the continuing economic and political difficulties in Russia, whereby there are uncertainties concerning the ability of these companies to generate revenue and to meet their payment requirements on time.

Poland: in 1998 local telephone operator, El Net SA, won a tender to provide telephone services in the Warsaw market. However, it failed to receive a licence when other bidders appealed against the decision. But Communications Minister Marek Zdrojewski is now reported as saying 'I would like to grant a licence to El-Net in the week preceding Easter'.

Hungary: enterprises belonging to the Hungarian Chemicals Industry Association (Mavesz) reported overall sales of US$5.79 billion in 1998, which is an increase of 4.2 per cent in real terms compared to the previous year. According to Head Secretary Laszlo Bondar, these figures include crude oil processing and plastics and rubber industries. The enterprises produce approximately 80-85 per cent of chemicals manufactured by the country.

Slovakia: last year the country's leading producer of industrial fertiliser and rubber chemicals accrued a gross income of 124 million Slovak crowns on sales of 6.232 billion and production of 6.189 billion crowns. Exports accounted for 81.74 per cent of the total, which primarily went to both Germany and the Czech Republic.


Czech Republic: the Czech President Vaclav Havel has said that the resignation of the whole of the European Commission is 'no tragedy' but merely stresses the need to re-inforce the importance of the European Parliament. He continued that 'The event has hinted that it would be good to strengthen the parliamentary, representative body because this is the main force which, representing the citizens, the Europeans, controls all apparatuses of what is called Brussels bureaucracy'.

Hungary: Csaba Laszlo, Hungarian Finance Ministry State Secretary, has stated that conditions for joining the single currency will not prevent European Union (EU) membership discussions. The Minister took part in a meeting of the European Parliament's economic, financial and industrial committee which was intended to assess candidate countries' preparedness for Economic and Monetary Union (EMU). Laszlo stated how 'The EMU is a field less complicated than either the environment or agriculture where special rules must be observed. Here, rules must simply be adopted, rather than incorporated into an existing body of law.'

Ukraine: British parliamentarians visiting the Ukraine have said that the country must deal with its economic problems if it is to integrate with the rest of Europe and move closer to the North Atlantic Treaty Organisation (NATO). Crispin Blunt, a member of the House of Commons Defence Committee, explained how 'The foreign policy of the government is being skilfully handled in its relationship with NATO on the one hand and in its relationships with Russia and other neighbours on the other. But there is a serious danger to the success of this policy. My fear is that unless urgent actions are taken over the economy of Ukraine, then its interest to the United Kingdom (UK) and the rest of the world is reduced for economic reasons and that will also have some effect on the strategic position of Ukraine.'.

Latvia: a report submitted by a special commission of the Council of Europe, which is in charge of combating racism and ethnic intolerance, outlines examples of discordant nationalism, intolerance and anti-Semitism in Latvia. Latvian President Guntis Ulmanis disagrees with the report, believing it to be extremely severe. It is also inconsistent with the conclusions drawn by several international experts and groups, the majority of which refer to significant steps being taken to protect human rights in Latvia.


Lithuania: the Lithuanian State Property Fund did not annul the tender for a majority stake in Lietuvas Kuras, a fuel retail and wholesale company, despite only one bid being submitted. The fund, which currently manages the privatisation process in Lithuania, is reported to be collecting more information about the potential investor.

Slovakia: according to Arpad Demko, the General Director of Nafta Gbely, a 41 per cent stake in the company needs to be reprivatised to a strategic investor as soon as possible. The Government had sold a 45.9 per cent stake in Nafta Gbely to Druha Obchodna for significantly less than the market price. The National Property Fund, the country's privatisation agency, said that it had concluded a deal with Druha Obchodna that 40.9 per cent of the 45.9 per cent stake would be restituted to the fund. Moreover, the fund said that no further action will be taken regarding the issue.

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