Skip to content. | Skip to navigation

Personal tools
Sections
You are here: Home Breaking news Czech cabinet agrees EUR 1.5bn for IMF eurozone package

Czech cabinet agrees EUR 1.5bn for IMF eurozone package

25 January 2012, 18:22 CET
— filed under: , , ,

(PRAGUE) - The Czech government on Wednesday approved a 1.5-billion-euro ($1.95 billion) loan to the International Monetary Fund, less than half its expected contribution of 3.5 billion euros, the premier said.

As the eurozone debt crisis mounted last year, the 17 countries that share the single currency pledged 150 billion euros in bilateral loans to the IMF, to be ploughed back into the debt-laden single currency region if needed.

At a December 9 summit, European leaders called for the IMF to be provided with a total of 200 billion euros, including contributions from non-eurozone countries like the Czech Republic, whose contribution was originally pegged at 3.5 billion euros.

"The government approved a request to the central bank to release 1.5 billion euros which it will provide as a loan to the IMF from its foreign currency reserves," Prime Minister Petr Necas told reporters.

"The original figure was really hard to accept because 50 percent of the bank's euro reserves would be exposed to the IMF," Necas added.

The loan is now to be submitted to a vote in parliament, where it should easily pass, given that Necas' coalition controls 115 of the chamber's 200 seats.

The eurozone is the key trading partner for the Czech Republic, a nation of 10.5 million which is bound to join the 17-member bloc under the terms of its 2004 European Union admission.

But Necas has refused to fix a date to adopt the euro during his current term, which ends in 2014, citing the eurozone's ongoing debt crisis as the primary reason.

The government also discussed the Czech Republic's participation in the eurozone's fiscal discipline deal, the so-called fiscal compact to be discussed at an EU summit on January 30.

"The EU should negotiate the final version of this document next Monday, so the Czech government could decide whether it will accede or not and what ratification procedure it will adopt," said Necas.

Last week, Necas's cabinet proposed a referendum on the issue -- a plan that Finance Minister Miroslav Kalousek said was "absolutely baffling" for his EU counterparts during Monday's talks in Brussels.


Document Actions