The CEZ tax

It takes people secure in their positions to announce market- moving and price-forming information just days before the annual shareholders' meeting that could ultimately sweep them from their perches. But that's just what the boys from ČEZ did yesterday when they forecast a 25% jump in wholesale electricity prices in Jan. Industry Minister Martin Říman criticized the announcement, but unless he uses the state's majority control to subdue or replace ČEZ's management, he'll be an accomplice. ČEZ's rising rates are in effect a tax by non-fiscal means. Politicians complain about them but rely on ČEZ's dividends to pad the state budget. For many companies, the gradual cut in the corporate tax rate will be more than offset by an increase in electricity rates. Full privatization of ČEZ has its own pitfalls, but it's perhaps the only way to change the way politicians look at the ČEZ Republic. [Czech Republic AGM]