Latest update: 01/11/2008 

- Czech Republic - economy - financial crisis


The Czech Republic weathers the financial storm
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While almost all the other EU member states are caught up in the whirlwind of the financial crisis, the Czech Republic, equipped with a solid banking system, is the exception to the rule. But how long can it resist?
By Virginie HERZ (text)

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While most Europeans have succumbed to panic, the Czechs are still smiling. And with good reason: their country is not affected by the financial crisis.

So far, the Czech banking system is resisting. One the one hand, this is because it was cleaned up in the 1990s. Financial instruments were not developed to the same extent as in other Western countries. On the other hand, it is because the Eurosceptic government has not called on the IMF. Keeping the Czech currency has also helped to preserve the country.

But the Czech economy is still strongly linked to the European Union – exports represent more than half the GDP – and should therefore suffer a slowdown in the coming months. Car production is already affected: 10,000 job cuts are announced in the Czech car sector for the coming months.

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