Press conference following the visit of Austrian Chancellor Werner Faymann

Jiří František Potužník, the prime minister's press spokesman for the Czech presidency of the Council of the EU: Good day ladies and gentlemen, welcome to the press conference of the Czech Prime Minister and Chairman of the Council of the EU, Mr. Mirek Topolánek, and Mr. Werner Faymann, the Federal Chancellor of Austria. To start, I would like to ask both gentlemen for a brief introduction. Then there will be space for your questions. Mr. Prime Minister.

Mirek Topolánek, Prime Minister of the Czech Republic: Good day, esteemed Mr. Chancellor. Of course during the crowded schedule of the Czech presidency, we have to find time for bilateral talks and it is behooves us to invite the leaders of the new Austrian government, the Austrian chancellor. It behooves us to discuss bilateral issues and possible problems. I must say that it was an honour to welcome Werner Faymann to Prague for working talks. We meet at the European for a, at the Council of the EU, and recently we were together in Bratislava at the celebrations of the introduction of the euro. Aside from the bilateral topics, we also discussed European topics. I think we could not avoid a discussion of the financial problems and economic problems of the entire EU and individual countries. We exchanged opinions with interest, on which ways the flaws will progress to solutions, which tools will be found and I must say, possibly to the surprise of journalists other than mine, that these tools are very similar, and these approaches are nearly the same, because economic laws are valid both in Austria and in the Czech Republic. In this sense we do not intend to surprise each other, and we agreed on an entire range of consultations. We could not avoid a discussion on energy security, because both Austria and the Czech Republic were immediately protected against the impacts of the gas crisis. Nonetheless our neighbours - not the Czech Republic and Austria – would be exposed within a number of weeks or months to a similar gas crisis, with a threatened economy, threatened quality of life and social standing as occurred in countries such as Slovakia, Bulgaria and the countries of the Balkans. We discussed Nabucco. We could not avoid in this discussion topics such as certain alternative sources, that would increase and will increase the security of gas supplies other than from a single source. We discussed problems that in their own way could divide us, but nevertheless, the above-standard relations between both countries have been confirmed as well as our mutual relations, and I think not only personal but working, political. We also discussed issues of the ratification of the information agreement and I would say the handling of the discussion, but I will not say the agreement of Austria, with nuclear energy and with Temelín. In recent years we have managed to sharply raise the level of discussion and information, and the fact that we do not agree should not in any way harm mutual relations. We touched on the free movement of labour. I had to express a certain extent of disagreement with extending the moratorium on free movement, but nevertheless it will not cause serious problems, because we are not even fulfilling the shuttle agreements that exist today. It's rather a psychological issue and in this sense we say it very openly. We discussed EU enlargement. Here we have similar interests and principles as Austria. We will want to accelerate the situation in the western Balkans, and will turn to other countries in the framework of the eastern partnership. I think the policy in this regard is very similar. I don't want to drag this out, and will leave space for my colleague. I'm very happy that I could meet the new chancellor in Austria so quickly after his accession.

Werner Faymann, Federal Chancellor of the Austrian Republic: (the Federal Chancellor's speech on the recording without translation)

Jiří František Potužník, the prime minister's press spokesman for the Czech presidency of the Council of the EU: Thank you for the introduction and now there is space for your questions if there are any. Please.

Czech Television: Good day, a question for both government leaders. You touched on this in the introduction, but nonetheless, during your discussions, was there any direct request from Austria to increasing safeguards for Czech or other eastern European banks? If so, what was the Czech response?

Mirek Topolánek, Prime Minister of the Czech Republic: I think it is no surprise that we withstood the first wave of financial problems in the banking sector. I don't want to repeat the reasons why again. That does not mean that the banks - which in addition are not Czech banks, but subsidiaries of foreign banks, including Austrian - would not need a cleanup. This occurred in the Netherlands. Undoubtable reports, which were leaked about the possibility of drawing certain financial assistance, did not occur because they were not necessary. We see the role somewhere else and we've already shown it. I think it is necessary to spur the banking sector, so that the money and the liquidity they may possibly receive from national governments be released into the real economy to get the market going again with both investment and operational loans, which is clearly the biggest problem. The lack of confidence between banks, the lack of confidence by banks toward projects, the lack of confidence of banks to real companies remains. This is rather a task for central banks or possibly stimulus packages, which it is possible to use but there aren't too many of those. We still see the role of the government of the Czech Republic in that we will take part jointly with others in solutions, solidarity solutions to the problems of other countries. So I – if the Chamber of Deputies approves it – we want to write an bond for EUR 200 million for Latvia. Other countries could get into problems. The solution should be European, joint and in this regard we will not clean up the subsidiaries of foreign banks. I don't think it is necessary. Liquidity is not the problem. Confidence is. For the countries where the parent company gets into problems, we are moving toward solutions by the Council of the EU for the cleanup or possible nationalisation and recapitalization of banks and this will occur where it is necessary.

Werner Faymann, Federal Chancellor of the Austrian Republic: (the Federal Chancellor's speech on the recording without translation)

Jiří František Potužník, the prime minister's press spokesman for the Czech presidency of the Council of the EU: Thank you, next question please.

ČTK: Good day. I have a question for the Chancellor. Prime Minister Topolánek mentioned here the obstacles in access to the Austrian labour market that you discussed. I would be interested to know if Austria has considered certain softening of these obstacles, which countries such as Germany have agreed to as of January, or whether Austria intends to use these for the entire transition period until April 2011?

Werner Faymann, Federal Chancellor of the Austrian Republic: (the Federal Chancellor's speech on the recording without translation)

Jiří František Potužník, the prime minister's press spokesman for the Czech presidency of the Council of the EU: Next question please.

Österreichische Rundfunk: (part of the question is left on the recording without translation). And one more question for Prime Minister Topolánek. How does the Czech government see it when the foreign banks invested so much? Don't you have the feeling that they should be able to suck out the money and take it elsewhere?

Werner Faymann, Federal Chancellor of the Austrian Republic: (the Federal Chancellor's speech on the recording without translation)

Mirek Topolánek, Prime Minister of the Czech Republic: I may start a bit more generally. The problem with banks' greater willingness to lend money to the business sector is first a crisis of confidence and it is also up to discussion between the central bank as the central regulator and banks in the given country. Our central bank seeks out and finds tools to spur the banks – regardless of where they are from with parent companies in whichever country – to have confidence in the business sector and for us to find tools to spur them to greater willingness to loan money. I do not see a reason why the golden egg of the Erste group, the branch of Erste Bank in the Czech Republic, which has long-term shown good results, should spoil its reputation on the Czech banking market by having its liquidity sucked out. This was not done even in the period of the first onset because the central bank introduced monitoring on liquidity movements from 30 days to daily monitoring, so we have had detailed information on liquidity movements. In this regard I really think that the banks, if they want to be active on the market for the long term, they will not act in the way you have mentioned. This leads us to something in our experience, for example, in the financial crisis, from the first onset, which is that a very strong domestic regulator. What it leads to is that we do not agree to the proposals that would mean cross-border regulation, the well-known HoushtHome system, because it would weaken the position of our regulator and we will rather push for the countries have more regulators in Europe. There are countries which have up to 87 various authorities and institutions regulating the financial and banking institutions centralise the problem first on the national level before we talk about any cross-border regulations, which could give parent banks greater rights to dispose of liquidity of those fiduciary companies in countries such as the Czech Republic. We aren't worried at this time. It has not occurred and the risk is also for the reason that the economy is not finished and this crisis will end at one point, and the behaviour of these banks will, I would say, influence and determine their further activity on that market. I am not afraid of how Raiffeisen or Erste Bank will behave on the Czech market, where they financed such giant investments; they won't behave so badly. That is my point of view, which comes from experience in the banking sector and not just here, but the banks also want to be active after this crisis.

Jiří František Potužník, the prime minister's press spokesman for the Czech presidency of the Council of the EU: Mr. Prime Minister, Mr. Chancellor, thank you for your answers. Ladies and gentlemen, thank you for your attention and we look forward to seeing you next time. Goodbye.