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Topolánek’s toppling leads to early Czech election

Manuel Alvarez-Rivera — Tue, 31 Mar 2009 00:37:00 +0000

by Manuel Alvarez-Rivera, Puerto Ricobr /br /The Czech Republic will be holding an early general election later this year - nearly a year ahead of schedule - after the center-right coalition government of Prime Minister Mirek Topolánek was brought down last week in a parliamentary no-confidence vote. Topolánek, who submitted his resignation last Thursday but remains as caretaker head of government and leader of the Civic Democratic Party (ODS) - the largest party in the Central European country's bicameral legislature - subsequently reached an agreement with former Prime Minister Jiří Paroubek, the leader of the Czech Social Democratic Party (#268;SSD) - the main opposition force - to hold an early poll next October; a specific date remains to be determined.br /br /Prime Minister Topolánek came to office following a closely fought general election in June 2006, which left the Chamber of Deputies - the lower house of the Czech Parliament - evenly split between left- and right-wing parties. However, in early 2007 Topolánek was able to secure a parliamentary majority with the help of two rebel #268;SSD deputies, and he went on to survive four no-confidence motions during the course of 2007 and 2008. Nonetheless, his government depended upon a fragile majority, which was finally shattered when four dissident deputies - two from ODS, plus two recently expelled from the Green Party (SZ) - sided with #268;SSD and the Communist Party of Bohemia and Moravia (KS#268;M) to pass by 101-96 a vote of no-confidence.br /br /Coincidentally, the fall of the Czech government came on the same day that Topolánek - who currently holds the European Union's rotating presidency - made headlines around the world when he criticized the economic stimulus program of U.S. President Barack Obama as "the road to hell." While the vote of confidence was triggered by allegations of abuse of state subsidies by a deputy who left #268;SSD to support ODS, some opposition deputies voted to bring down Topolánek as a protest against his government's economic policies, which according to them failed to deal effectively with the global financial crisis; although the Czech economy is not in as dire straits as those of other nearby countries (such as Hungary), the Czech Republic is nonetheless forecast to suffer a recession this year.br /br /Opinion polls have #268;SSD ahead of ODS; that said, the gap between the two parties appears to be narrowing down. Nonetheless, the Social Democrats are hoping for a repeat of their performance in last October's regional and Senate elections, in which #268;SSD captured 23 of 27 Senate mandates up for renewal, depriving ODS of its absolute majority in the upper house of Parliament. Although it has some ex-Communist members, #268;SSD is not a post-Communist party; unlike major left-of-center parties in other Eastern European countries, it traces its roots to the Social Democratic Party that was forcibly merged with the Communists in 1948. However, the Czech Social Democrats have to compete on the left with the Communists, who still command a significant following.br /br /The Czech Chamber of Deputies is elected by party-list proportional representation in regional constituencies - A HREF="http://electionresources.org/cz/"Parliamentary Elections in the Czech Republic/A has a review of the Czech electoral system - and no single party has ever commanded an absolute lower house majority. Moreover, the ongoing presence of a sizable, unreformed Communist Party has greatly complicated the task of forming stable governments in the Czech Republic. While the Social Democrats have called upon Communist support from time to time (as they did for last week's no-confidence vote), neither them nor the parties to their right regard the Communists as suitable coalition partners, largely for historical reasons: save for the short-lived "Prague Spring" of 1968, the Communist Party governed Czechoslovakia - the now-defunct federation of the Czech Republic and Slovakia - in a totalitarian fashion from 1948 to 1989, when the Velvet Revolution put an end to the Communist regime.br /br /As a result, since 1996 the Czech Republic has been ruled either by shaky coalition cabinets, such as those formed from 2002 to 2006 by #268;SSD and the four party coalition headed by the Christian and Democratic Union-Czechoslovak People's Party (KDU-#268;SL), and from 2007 to the present by ODS, KDU-#268;SL and SZ; or by minority governments dependent upon the good will of the opposition, as was the case from 1998 to 2002, when ODS reached an "opposition agreement" with #268;SSD under which the Civic Democrats tolerated Milos Zeman's minority Social Democratic government without supporting it.br /br /In fact, Topolánek may have to reach out to the Social Democrats in order to secure Senate passage of the Lisbon Treaty, which would streamline the functioning of the European Union. While Topolánek is in favor of the treaty, many Euroskeptics in ODS remain opposed to it, as is President Vaclav Klaus, the former leader of the Civic Democrats.br /br /At this juncture, it remains unclear what will happen to Prime Minister Topolánek's outgoing government until the election is held. #268;SSD leader Paroubek declared that he is willing to tolerate the government until the end of June (when Sweden takes over the EU presidency) if certain conditions are met, but favors the appointment of an interim government of non-party experts after that date. Meanwhile, Topolánek insists on remaining in office, but he and President Klaus - who has the right to appoint the next government - are political enemies, and not surprisingly Klaus is proposing the formation of a new cabinet without further delay. However, Czech governments require majority support in the Chamber of Deputies in order to remain in office, and in light of last week's events it appears rather unlikely that such support would be forthcoming.div class="blogger-post-footer"img width='1' height='1' src='http://res1.blogblog.com/tracker/8991369883287712098-855501266050855123?l=globaleconomydoesmatter.blogspot.com'//div

And Then There’s This…Thursday, March 26th, 2009

Contrarian Profits — Thu, 26 Mar 2009 22:39:23 +0000

pGold was under pressure right from the open in Sydney on Wednesday morning. This pressure accelerated once London was open for business. The bottom was in about fifteen minutes after Comex floor trading began in New York. A rally began that was highlighted by a big spike in the price around the time of the London p.m. fix. Was it that#8230;or Geithner#8217;s lips moving? The top price of the day arrived shortly after Comex trading ended and electronic trading commenced. All in all, a very interesting 24 hours./p pThe usual N.Y. commentator had this to say about yesterday#8217;s activities#8230;#8221;Wednesday#8217;s dramatic Comex session was notable for huge volume#8211;particularly before the Geithner #8220;Open Mouth/Insert Foot#8221; incident. By 10 a.m., 117,039 lots were estimated#8230;/p

Outlook for Czech economy is not so bright.

Vlada Kynsky — Tue, 09 Dec 2008 18:51:00 +0000

I have started this blog as a purely focused on emerging markets in Central and Eastern Europe. Later on I have been adding my analysis about global stock markets. Anyway whatever happens in US is influencing direction for CEE markets.br /br /Czech economy growth in last Q3 by 4,7%. Still impressive. But the outlook doesn't look bright. Automotive industry accounts significant share of national product. Currently it is about 7,5%. Czech and Slovak Republics are the countries with the biggest number of produced cars per capita. Major brands produced in Czech Republic are Skoda from Volkswagen Group (VLKPY), Toyota (TM), PSA Peugeot Citroen (PEUGY) and Hyundai.br /br /There are already some plans/proposals in pipeline prepared by Czech government. Support packages related only to automotive industry like VAT deduction to all kinds of vehicles. Now it is related only to business cars (eg pick-ups, vans..). Another broad proposal is general VAT decrease by one or more percent to support all industries.br /br /Talking about prediction of GDP growth, new (the most pessimistic) analysis appeared which already see Czech economy contracting in 2009.div class="blogger-post-footer"http://stockweb.blogspot.com/atom.xml/div pa href="http://feedads.googleadservices.com/~a/qfWZdwezJaPmT9xrNt7wEDrcGjo/a"img src="http://feedads.googleadservices.com/~a/qfWZdwezJaPmT9xrNt7wEDrcGjo/i" border="0" ismap="true"/img/a/pdiv class="feedflare" a href="http://feedproxy.google.com/~f/Stockweb?a=LrN3JtHE"img src="http://feedproxy.google.com/~f/Stockweb?d=41" border="0"/img/a /div

Short the Czech Koruna for ‘Earth-Shattering’ Profits

Contrarian Profits — Tue, 21 Oct 2008 17:11:16 +0000

Currency expert Jack Crooks says this crisis is creating great trading opportunities in emerging markets. The Czech koruna soared 250% against the US dollar in the last seven years. But the greenback has found a bottom. And Jack says the reverse trend will be just as “earth shattering”. This is why shorting the koruna is a sure way to bag huge profits.

This from the Sovereign Society:

Again, it’s a problem of dependence. The Czech Republic is highly dependent on growth and financial market stability across the Eurozone. The major countries of Europe represent the key export markets and the financial institutions funneling foreign direct investment into central European countries. But now, both growth and financial stability in the Eurozone are being turned…

RA’s Daily Russia News Blast – Oct 3, 2008

Robert Amsterdam — Fri, 03 Oct 2008 02:50:21 +0000

TODAY: Russia and Ukraine agree on gradual rise in energy prices, disagree over Georgian arms; Czech government suspicious of Russian intelligence; will troops withdraw from Georgia? Union of Right Forces disbands, Kremlin pressure suspected; Politkovskaya case reaches court. Russia and Ukraine have agreed on a gradual rise in gas prices over the next three years, as opposed to an immediate sharp rise that many predicted. ‘We came to the conclusion that our countries don't need price shock therapy,’ said Yulia Tymoshenko, although Prime Minister Vladimir Putin expressed some doubt about future relations between the two countries, and tensions over allegations that Ukraine supplied arms to Georgia remain strong. ‘I don't think there is a graver crime than supplying arms to a conflict zone,’ Putin said. The Czech government is concerned over intensified intelligence activity by, it alleges, Russian agencies. Russia has allowed EU observers into Georgia’s breakaway territories to oversee their planned troop withdrawal, but reports suggest that they aren’t seeing much. The EU Council’s Parliamentary Assemble (PACE) wants Russia to annul its recognition of Abkhazia and South Ossetia. Next week, Russia will hold its largest air force exercises since the collapse of the Soviet Union ‘to demonstrate its force to the world, particularly the US’. It also plans to deploy a new nuclear missile next year.