Final Word from Thursday, September 14, 2006
The departing gift of the ČSSD government was a reversal in the direction of the crown. The Czech currency has fallen by 1.2% since ČSSD left office and is now at Kč 28.53/euro. ODS must take part of the "credit," of course, because it has been highlighting the growing budget problem. ČSSD masked the full impact of its big-spending plans to the very last minute, and ODS has sought political points in exposing them. Premier Mirek Topolánek went on record as saying that Bohuslav Sobotka was the worst finance minister ever. The flood of foreign direct investment and the surge in exports have propped up the crown and diverted attention away from the explosion in government outlays. Czechs have become used to the idea of entering the eurozone with a crown at something like Kč 26-27/euro, but it's time to run the numbers again. Big spending is a habit that can't be kicked.[Czech Republic depreciation appreciation foreign trade FDI expenditures deficit]