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WORLD> Europe
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Czech govt loses confidence vote
(Agencies)
Updated: 2009-03-25 14:40 The tight rules for euro entry, combined with the fact that interest rates are set by the independent central bank, would curtail any major impact on policy of a change of government.
Reflecting this, financial markets have largely shrugged off the political uncertainty. The crown has gained 10 percent from a mid-February low and outperformed its peers in the region. "The key to all these things is what happens next," said Neal Shearing, economist at Capital Economics. "If we end up with a technocrat government ... then it could end up being market positive." "If on the other end you end up with a period of infighting it could be market negative and economy negative and could end up in a big mess," he said. Although the Czech economy has suffered from a slump in exports, its banks have needed no bailouts, the public has been calm and Czechs are not heavily exposed to foreign debt. Other issues affected by the ouster could be a government plan to host a US anti-missile radar site opposed by the Social Democrats, already on ice due to a lack of support. Dmitry Rogozin, Russia's envoy to NATO, told Vesti-24 channel that those who forced Topolanek's government to resign were categorically against the deployment of the radar. "Just before the meeting of our two (Russian and US) presidents in London on April 1 ... the Americans are now facing practically insurmountable difficulties in deploying their strategic anti-missile defense system in Poland and the Czech Republic," he said. The fall of the government also calls into question the future of the EU's Lisbon treaty, meant to allow the bloc to function more effectively. Topolanek had backed the treaty despite opposition from party backbenchers, and said after the vote that, "if I lose control of the situation (in my party), then the Lisbon Treaty will not pass."
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