Page 5 - bne_newspaper_June_16_2017

The Regions This Week
June 16, 2017 www.intellinews.com I Page 5
Central Europe
Czech Prime Minister Bohuslav Sobotka an- nounced he will step aside as Social Democratic leader as the party’s opinion poll ratings remain in the doldrums just four months before the gen- eral election. Foreign Minister Lubomir Zaoralek will lead the party into the elections.
The Czech central bank will raise counter- cyclical capital requirements for banks as part of a campaign to temper hot credit markets. The CNB said that from July 1, 2018 banks must hold a buffer of 1% against domestic lending. The current counter-cyclical buffer, introduced at the start of the year, stands at 0.5%.
The Czech Republic will file a complaint at the European Union Court of Justice against the European Commission’s proposed revision of the Firearms Directive designed to tighten gun controls in order to combat terrorism. Interior Minister Milan Chovanec has proposed that gun laws should be relaxed so that citizens can use arms against terrorists. The Czech Republic has never experienced a terrorist attack.
The Czech current account recorded a surplus of CZK14.3bn in April. The trade surplus deteriorated sharply in April, however, halving to CZK10.6bn as a lull in EU car sales hit exports. However, divi- dend outflow remains subdued, with no more than CZK4.9bn leaving the country via that route in April.
Unions have called a strike at Volkswagen Slo- vakia’s plant in Bratislava after the failure to reach a deal over wages. Across the region ten- sions have grown in labour relations over the last year or more, particularly in the auto sector, as the Visegrad countries face a worsening labour shortage.
Slovak inflation accelerated once more in May as it pushed to 1.1% y/y. The annual rate of expan- sion in the CPI was 0.3pp quicker than in April. On a monthly basis, prices grew 0.2% m/m, double the rate of the previous month.
The average Slovak gross monthly wage rose 3.5% y/y to €897 in the first quarter of the year.
Polish financial market regulator KNF rejected a proposal from Austrian banking group RBI to postpone the IPO of least 15% of its Polish busi- ness Raiffeisen Bank Polska by June 30. The decision puts RBI under considerable pressure to carry out the IPO of its Polish unit in under three weeks in unfavourable market conditions that have hit valuations.
Poland’s current account recorded a deficit of nearly PLN1.2bn (€275mn) in April, narrowing slightly from the shortage of almost PLN3.2bn the previous month but swinging into the negative ter- ritory from a surplus of over PLN2.9mn in April last year, the National Bank of Poland (NBP) reported.
Polish core inflation gained 0.8% y/y in May. The reading – which is 0.1pp lower compared to April – shows core inflation slowing after four months of acceleration. The headline CPI reading re- mained relatively subdued at 1.9% y/y in May.
Hungarian industrial production fell 3% y/y in April, extending the sector's erratic performance since the start of 2016. The result is a stark con- trast to the 13.4% rise seen in March.
The European Parliament lifted the immunity of Lithuanian MEP and former president Rolandas Paksas in connection with a corruption probe un- derway in the Baltic state. Paksas is suspected of accepting a bribe from Gedvydas Vainauskas, one of the owners of media group Lietuvos Rytas.
The Latvian current account showed a surplus of nearly 59mn in April, after registering a revised shortage of nearly €34mn the previous month. Meanwhile, the Estonian current account balance came in at a deficit of €8.7mn in April, follow-
ing a surplus of €25.1mn in April. The Lithuanian current account deficit increased to €166.7mn in April from €57.3mn in March.