Government Collapse To Have Regional Implications

The Czech government's loss of a non-confidence vote on March 24 will have political repercussions throughout the region. With the Czech Republic now likely to face months of policy uncertainty, key regional issues including the ratification of the Lisbon Treaty, the implementation of a US anti-missile shield, and EU relations with Russia have all been put into question. Domestically, we caution that this will weigh on Czech market performance, both as investors price in the reduced capacity of the government to respond to the global financial crisis and the accentuation in volatility that will result from a protracted period of interim government.

To read the full article, please choose one of the following options: