Press Conferences

19. 3. 2007 9:33

Press conference of the Prime Minister of the CR, Mirek Topolánek after the meeting of the government on Monday, 19th March, 2007

Martin Schmarcz, Head of the Press Department of the Office of the Government: Good afternoon, ladies and gentlemen, welcome to the press conference after the meeting of the government of the Czech Republic. As you can see, it is an eternal true that governing is complicated. And so, as I do not detain it too long, I give the floor, as an introduction, to the Prime Minister, so that he inform you on the agenda of the meeting and then I will give the floor to others.

Mirek Topolánek, Prime Minister of the CR: Thank you for the floor. I do not think, unlike Martin Schmarcz, that it is so complicated, but it has taken longer time, nothing more, but it was not complicated in the end. We did not have many points on the agenda that had to be considered in the course of the debate, but they were very important and there were extensive debates on them. Therefore, we arrived at today's press conference later and I apologize for that. After consideration of certain issues of the agenda, we decided to revert to them next week. One of them was the Road Traffic Act, where we debated the duty of establishing special training courses for truck drivers. We suspended it not because of disagreement, but because we need additional analyses to be made. We debated the Criminal Code, which is a kind of an approximation norm. Very interesting debate we held regarding the subject-matter of the Act on the Czech National Bank, whose role will be different after the introduction of the euro; we are going to prepare this law well in advance, as it has a long vacantia legis. The debate was held on the role of the central bank in case of our accession to euro and on superiority of the central bank in Frankfurt. We approved the subject-matter of the law in this sense, which is already prepared and we shortened the term of its submission to March of the next year, if I am not mistaken. The details I leave for the relevant ministers. I think that a very important point concerned quantification of obligations resulting from so called Public Private Partnership agreements, which is an issue that the government deals repeatedly, and I will leave it again to minister Kalousek to inform you about this issue. We also decided, I will leave the information to Martin Říman, on provision of emergency reserves of oil. The government gave its blessing to the strategy of Jiří Čunek on the regeneration of areas affected by devastative windstorm in January 2007. We approved formally suspension of activities of certain political parties; it was a point of rather formal character because political parties did not fulfil their duties. We approved negotiation team for negotiations with the DG Regio i.e. concerning structural funds and the National Reference Framework. We discussed, and I will leave it to Miroslav Kalousek again, financial coverage of the state budget of this year, as we already know that expenditures will be higher by 7 billion crowns at least. The key issue of the agenda, which prolonged the meeting as it had been expected, concerned the sale of the state share in the company of the ČEZ. I can assure you that the debate was very detailed, very consistent and the relevant members of the Supervisory Board and the Board of Directors of the ČEZ were invited, and finally we decided to agree with the proposal of the draft of resolution, which prepared Miroslav Kalousek. I can say that the debate was very interesting, not only because it was in fact one of two eventualities how to cover budget of the State Fund of Transport Infrastructure in this year, but because it strengthened our coalition governance. Now I ask Miroslav Kalousek to comment on points that concerned him. You have the floor.

Martin Schmarcz, Head of the Press Department of the Office of the Government: Minister of Finance Miroslav Kalousek has the floor.

Miroslav Kalousek, Minister of Finance: I will comment just briefly on points I have been assigned to inform you on. Of course, there was a very interesting debate on the subject-matter of the Act on the Czech national Bank; it was a very professional debate. The articulated bill will be submitted by the Czech National Bank by 31st March 2008 and it will include significant system change; I mean the transfer of competence of primary legislation from the Czech National Bank to the Ministry of Finance. Competence of primary legislation, which is rather unusual in Europe, will be transferred to the government, as it has been agreed. In the sphere of the Private Public Partnership projects, we want to make analysis of all the obligations with regard to the fact that a risk threatens that agreements concluded might mean extensive expenditures of the state and thus deepen its indebtedness and influence its mandatory expenditures. From the point of view of quality of information that the government and the Ministry of finance have regarding projects PPP, it is possible to divide them into three groups. The first group involves really central projects, the principal projects of the government and we have the entire information about them. It spans about 35 billion crowns; those with long-term life cycle - 80 billion crowns. The second group of contracts, which were concluded in the time of validity of the Permission Act, enables rather detailed monitoring than consistent regulation. And the third group - there we have certain fears concerning it, because it is based on contract that had been concluded before the Permission Act and thus the extent of information is very small and I asked my colleagues today on detailed specification, so that we could identify all the possible obligations resulting from the PPP projects and could decided on their regulation so that to prevent increase of the risk of future indebtedness of the state. The most interesting point, I do not know if I have not forgotten some of points that you had assigned to me, Prime Minister, was the point concerning the approval of the government to sell 7% of shares of the company of the ČEZ on the security market through a legal entity. It concerns the sale on the security market and the debate itself was concentrated on the actual rate of the risk, which might occur in case the state loses its two-third qualified majority at the general meeting. The unambiguous result of the debate was that such a risk is just theoretical, virtual, and that it is impossible for it to occur in the practice. Now the state is owner of 67,6% of shares and the rest of shares is in possession of 120 000 of small shareholders. The biggest of them had 1,5% of shares. It is absurd to imagine that he could gather 120 000 shareholders, who would vote in accord against the state; it is an imagination without real basis and we do not afraid of loosing our qualified majority. Revenue of this 7% sale of shares will be revenue of the state budget and it will be consequently transferred to the State Fund of Transport Infrastructure.

Mirek Topolánek, Prime Minister of the CR: I just add that we had decided earlier that a pilot project would be prepared of the cooperation of the private and public sectors, as it is not an intention of the government to block these project; on the contrary, we want to avoid all the problems, which disqualified these projects in the past and to try to prepare projects, which would mean confirmation of all the positive features that are represented by the cooperation of the private and public sector. I ask minister Říman to comment on his points.

Martin Schmarcz, Head of the Press Department of the Office of the Government: The Minister of Industry and Trade, Martin Říman, has the floor.

Martin Říman, Minister of Industry and Trade: Thank you, good afternoon. I have one more remark concerning the sale of the company of the ČEZ. I assured the government and members of the government that the transaction would have no impact on the energy security, which is being frequently discussed now, at all. It results from what the Minister of Finance had said, after all, it is evident that both small and great investors are very interested in shares of the ČEZ on the market and that it is not possible to expect that those 7% of shares could be bought by the only one investor. As to the other point concerning administration of oil reserves, that was rather simple issue based on the fact that the consumption of oil and oil products increases in the Czech Republic. And if the Czech Republic wants to secure the energy security reserve, i.e. the reserve for 90 day, it has to increase those reserves in compliance with the increasing consumption; and these reserves must be paid somehow, it is not free of charge and therefore it was suggested to the government to earmark 300 million crowns from the reserve fund of the government. On the other hand the Administration of State Material Reserves will realize its property in different time; it will decrease reserves of certain commodities, which ceases to be significant and those 300 million crowns will be transferred to the state budget. Nevertheless, it will be those 90 – 100 days from the point of view of energy security as a directive of the EU requires.

Martin Schmarcz, Head of the Press Department of the Office of the Government: Ladies and gentlemen, if the Prime Minister has nothing to add, there is about ten-minute time for your questions. I could see the TV Nova, then Bloomberg. So the TV Nova, please.

Kamil Houska, TV Nova: Good afternoon, I have questions concerning the ČEZ Prime Minister. First, I wonder if you could inform us about the expected revenue of the share sale. You must have any idea of it. And then, I would like to know, you said that all minister were for, whether also ministers of the Green Party took part in the vote and whether we can understand that they vote for it. Thank you.

Mirek Topolánek, Prime Minister of the CR: That was a typical manipulation; I did not say that all of us were for; I said that nobody was against. And I remember the sentence well; you can find it in records. It results from it that some of them were not for, it means that present ministers of the Green Party abstained from the vote, which was a maximum after the debate, as they arrive at the meeting with a negative standpoint and finally they more or less accepted this request. Therefore I regard it as a great success and as strengthening of the coalition; it was not any kind of walking over ours opponents; on the contrary, it was several-hour debate, and I regard their abstention as a kind of approval. This is the first matter. The revenue is clear. The government supposes that the revenue of the transaction will be those 31 billion crowns, which were approved in the state budget, as a minimum; it concerns expenditures of the State Fund of Transport Infrastructure and the government does not expect significantly higher amount.

Martin Schmarcz, Head of the Press Department of the Office of the Government: Bloomberg, please.

Sean Carney, Dow Jones Newswires: Good afternoon, have you formulated the provision concerning the repurchase of shares? And what is expected time horizon of the sale? Thank you.

Mirek Topolánek, Prime Minister of the CR: This is exactly the information I cannot give you. I would say that the Minister of Finance was charged to sign the agreement with a legal entity, which will organize the sale on the security market in the near future; there are no preconditions there. The only matter, which we approved, was the sale of 7% of shares and we expressed it in number of shares. There is nothing more in the resolution, in fact, and it cannot be there.

Sean Carney, Dow Jones Newswires: And when?

Miroslav Kalousek, Minister of Finance: During 2007.

Andrea Dudíková, Bloomberg press agency: I would like to know whether you could tell us if the sale of the ČEZ will be organized through the Prague Stock Exchange or through other security markets. And the second matter, could you say whether the ČEZ could repurchase the shares and how. Thank you.

Miroslav Kalousek, Minister of Finance: I will not answer the second question; it is not a task of the state or of the Minister of Finance. The task of the Minister of Finance is to ensure sale of 7%of shares on the security market. It means that further procedure will include choice of the most convenient legal entity, in compliance with valid legislation, which will sell on our behalf those 7% of shares on the security market in the most advantageous way.

Mirek Topolánek, Prime Minister of the CR: I think that you could have answered the second question herself, because it is a matter that results from laws of this country and if it would be hypothetically possible, then the General Meeting would have to approve it, nobody else.

Miroslav Kalousek, Minister of Finance: I ask you to understand that, as you certainly know, anybody of us must not say anything that could have impact on price of shares; therefore I will not tell you any exact deadline, any exact person by the time the agreement is signed. And any information concerning this issue will be treated like this. We chose the sale of 7% of shares on the security market from all the possible variants primarily because it was the most transparent and the fairest way of a sale. We are going to keep this attitude, of course.

Andrea Dudíková, Bloomberg press agency: And will it be sold only through the Prague Stock Exchange?

Miroslav Kalousek, Minister of Finance: We will choose the most suitable legal entity, which will sell shares on the security market in a most suitable way. Thank you.

Martin Schmarcz, Head of the Press Department of the Office of the Government: Last two questions, please.

Vladimír Piskáček, Hospodářské noviny: Good afternoon. I would like to know whether also other variant were considered, whether they concerned the 7% sale of shares, increasing of the deficit, further variants of forming the State Fund of Transport Infrastructure and its budget. Thank you.

Miroslav Kalousek, Minister of Finance: No, if we are talking about further variants of coverage of the deficit, there were only two of them and the decision had been made last year during the vote on the state budget, in fact. The factual deficit is 122 billion crowns, the real account deficit is 91,3 billion crowns; the factual deficit of the state budget is 122 billion crowns, because we must add those 31 billion crowns of the extraordinary revenue, which has to be added to regular and regularly repeated expenditures, to those 91,3 billion crowns. The government and the Chamber of Deputies were solving the problem in autumn last year, how to cover this 122 billion deficit. There were two variants there – to borrow those 122 billion crowns or to borrow only 91,3 billion crowns and to cover 31 billion crowns from the sale of property. It decided to choose the second variant. The decision was made in the last year. It is possible to state that we do not have any other fair and transparent variant that could be managed in a proper time and which would not impair the state, than the variant of sale of 7% of shares of the ČEZ. It means that we debated other variants how to sell it. The sale on the security market was not the only one variant, of course; the material included other possible variants of the sale. And the government decided to sell it on the security market using the most transparent and fairest method.

Martin Schmarcz, Head of the Press Department of the Office of the Government: Last question, please.

Jan Korselt, Reuters: I would like to ask regarding that possibility to repurchase, whether the state will support at the General Meeting in April the possibility to repurchase of shares by the ČEZ. And what part would it be? Can you say any details concerning this matter?

Miroslav Kalousek, Minister of Finance: The state will not push anything. The state will sell 7% of shares. Whether it will ask the company of ČEZ for the repurchase or not, I really do not know. And because I do not know it, I cannot say anything about the response of the state.

Martin Schmarcz, Head of the Press Department of the Office of the Government: I wanted to ask for the last question, but so that the Česká televize would not be angry with us, if it is a brief question .... ?

Alice Mchaálková, ČT: But it does not concern today's meeting of the government, nevertheless, there is a note of Poland here and Poland requires about 380 hectare of lands in Silesia. Prime Minister, you have already negotiated about it during your visit to Poland. In what stage the matter is, when the government could debate it or what the government of the Czech Republic will require? Thank you.

Mirek Topolánek, Prime Minister of the CR: This matter concerns the year 1958. The disproportion is unclear or rather unsolved. We agreed to finish it. Previous government had failed. There is, of course, connection with pieces of lands of Poles living in the Czech territory. There is a question of sales to third persons; if there will be pieces of lands available to compensate them, it will be done. There is will on both sides and the preparation of the action is not a question of a month, but we would like to achieve it within this election period; to settle this debt, which originated in the past. But there are no problems regarding relationships between the Czech Republic and Poland; it is rather a kind of obligation, which is rather formal, because it does not concern large pieces of land. We want to compensate it in a natural way. In case the frontiers are not in a natural state, we will revert them in the natural state; in case there is a river or a mountain. If the property will be transferred to Polish citizens, who live in this area, such lands could be transferred to Poland. I am not acquainted with the problem in such details and therefore I cannot specify the exact deadline, but I know that the relevant authorities of ours are dealing with this issue and are preparing the solution together with Poles. I cannot see any serious problem in it.

Martin Schmarcz, Head of the Press Department of the Office of the Government: Ladies and gentlemen, thank you for your attention.

print article   email   facebook   twitter