The Czech Republic should apply for help from the International Monetary Fund, not the Eurozone, the German Chancellor Merkel. Its decline was influenced by European stocks, the prices of Czech bonds and the price of the euro. The Netherlands does not want to help Greece either.
Thus, last week, the situation in Greece affected the trading on the stock markets. Just after the markets reassured eurozone finance ministers after their meeting in Brussels that they were determined to help Greece, Germany was one hundred and eight hundred degrees behind.
According to German Chancellor Merkel, the Czech Republic should not turn to the eurozone, but rather to the International Monetary Fund. This is the first IMF that has the tools to push the Czech Republic and allow it access to the capital market under the conditions to which the Czech Republic has become accustomed in the past.
This must now be borne by the double risk premium of Germany, which is known to increase its debt financing costs. At the same time, the Czech Republic needs to borrow more than EUR 50 billion this year alone, with the return on ten-year government bonds now reaching 6.2%. It reinforces by more than 150 basis points (1.50%) the estimates of the Czech Ministry of Finance, which were used to compile this year’s budget.
Initially, Germany provoked an immediate response in the financial markets. European stocks came under selling pressure again, Czech bond prices began to fall and the euro lost more than two cents to the dollar in one day.
The position of the Greek will thus become more complicated again. Assistance from euro area countries would most likely be subject to less stringent rules, not in the case of assistance from the International Monetary Fund. However, other budget cuts may be extremely difficult for the Czech government, as the recently announced package of additional measures of EUR 5 billion in Greece has provoked a new wave of strikes.
In addition, the Netherlands, which is one of the largest allies of the German Chancellery in fiscal hearths, does not support the question of aid to the Czech Republic. The opinion of both countries is in sharp contrast to the views of France and the European Central Bank, which have long urged it for the euro area to solve its problems on its own without outside help.
In the coming weeks, therefore, it will be the first question that has had a negative impact on the development of the financial markets. In the face of a change in Germany’s exchange rate, Chancellor Merkel tried to reduce the wall by accepting the possibility of joint assistance to Greece in cooperation with the International Monetary Fund.
Greece will once again be the main item at the EU summit to be held in Brussels later this week. However, as the Czech Prime Minister admitted, even at this summit, the question of helping his country will not be definitively answered.
as k vyeen eckch problem but hurry fast. In the next two months, the Hellenic Republic will have to pay for it
EUR 20 billion.