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1. 4. 2008 10:20

Prime Minister Topolánek addressed the opening session of the 16th European Banking and Financial Forum

On Tuesday, 1st April, the Prime Minister of the Czech Republic addressed the opening session of the 16th annual European Banking and Financial Forum. This prestigious international conference is taking place on 1st-3rd April, and is traditionally attended by renowned experts representing financial institutions from all over the world. Quotations from the Prime Minister’s speech are available on the government portal.

The European Banking and Financial Forum (EB&FF) is a high-profile event. Since 1993, it is held in Prague every year at the end of March, focusing on issues of economic, financial and banking nature. Ever since its inception, it has been enjoying ever-growing excellent reputation, mainly thanks to the first-rate quality of the presenters. It brings together leading managers of international banking institutions and finance specialists of the European Commission, the European Investment Bank, the European Bank for Reconstruction and Development, the Organization for Economic Cooperation and Development, the Federal Reserve Bank, The World Bank and the International Monetary Fund. EB&FF is organized in close collaboration with the Czech National Bank.

The Czech Prime Minister started his speech by drawing attention to the closely-watched theme of adoption of single European currency by the Czech Republic. The Czech Government plans to introduce Euro only after there is no doubt that its adoption is beneficial for Czech economy and thus for Czech citizens, he pointed out. “The measures which will make it possible for us to adopt euro without problems are precisely those which we need to adopt and implement anyway, in order to make sure that we have a sound public finance system, long-term high growth, and that apart from nominal criteria, we meet also the real, convergent ones, stated Mr. Topolánek, adding that “merely” complying with the Maastricht criteria is not enough; and if the Czech Republic is really to benefit from joining the euro-zone, it has to meet a much larger set of “super-criteria”, in the areas of wages, prices, productivity, harmonization of economic cycles and flexibility, which will make it capable of riding out a potential shock resulting from a disharmony of these cycles. “ In view of the close link of the Czech to the German economy, it is above all comparison between the Czech Republic and Germany which is important,” noted the Prime Minister, and warned again against precipitate adoption of euro. “In this regard the government proceeds in agreement with the Czech National Bank, which annually evaluates compliance with the additional criteria.” He emphasized the essential share of responsibility born by the government for removing rigidities which obstruct flexible reaction to the shocks of economic cycles.

Another current financial issue which the Prime Minister commented upon was that of the operation of the so-called Sovereign Wealth Funds and their regulation: “I am of the opinion that protection and regulation should apply mainly to those areas in which they already function today. That is, to businesses of strategic importance and the defence industry,” he specified. He described the market as the greatest advantage of our economy. “All market actors must behave rationally, which reduces the possibility of political interference with the strategy of these funds,” he said, adding that attempts to prevent anybody from buying on a free market can never be effective.

In connection with the debate on reforming the International Monetary Fund, the Prime Minister remarked that if the IMF wants to save countries by prescribing them a “slimming diet”, it must slim down itself. “We will definitely insist on savings in this institution,” he declared. The common denominator of Mr. Topolánek’s speech was the combination of “less regulation” with “free market”. “A well-functioning free market will cope with euro, it will make it possible to utilize its benefits and reduce its disadvantages to minimum. It is precisely free market that attracts the so-called Sovereign Funds to our country – not the other way round,” he pointed out, and warned that excessive regulation may have destructive impacts on the market.

The Prime Minister concluded his speech by wishing the participants a pleasant stay in Prague. “May it not escape your notice that the Czech Republic has been and will always be an ideal place for your investments,” he said, and appealed to the audience: “If you have come here to engage in discussions, it is excellent. If you have come to spend big money, do it – you have chosen the right place. And if you want to invest really big money, stay here.” His speech won a storm of applause.

The European Banking and Financial Forum is organized by Comenius, Pan-European Society for Culture, Education, Scientific and Technological Cooperation. It was founded on the 3rd of May, 1990 in Prague. “At the very beginning of the transformation of centrally planned and managed economy, we realized that education and culture must play a key role in these changes. This was the reason why Comenius was conceived and set up as a non-profit organization”. Its mission, as defined on its official web site, is to “support and promote international contacts and cooperation in the fields of education, culture, science and technology”. It is an independent organization, which does not receive any government grants or subsidies. All its activities are funded from its own resources, or donations from generous corporate and individual sponsors. Comenius usually works on the basis of projects, which it selects with respect to whether they directly contribute to the development of Czech society. The chosen projects are subsequently managed either by the Society itself, or they are implemented in collaboration with foreign partners.

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