PRAGUE, Sept 1 (Reuters) - Czech President Vaclav Klaus
announced on Tuesday a ruling by the Constitutional Court had
delayed an Oct. 9-10 general election indefinitely, following a
complaint by an independent member of the outgoing parliament.
Klaus said in a statement the ruling had sparked a
constitutional crisis that he would try to resolve as soon as
possible. The court said a new date could be set only after it
made a final decision on the deputy's complaint.
The Czech crown <EURCZK=> extended losses on the day falling
around 0.3 percent to near session lows at 25.675 to the euro.
Dealers said bond markets showed little reaction, with most
trading wound up for the day when the news first came out.
However, dealers expected some negative pressure as delays
on elections could hurt budget talks.
Following are comments from politicians and economic and
political analysts on the issue.
MIREK TOPOLANEK, FORMER PM AND CHAIRMAN, CIVIC DEMOCRATS
"I consider today's decision by the Constitutional Court as
an irresponsible step, which may have a substantial impact not
only on the political development in the country, but it could
also deepen the economic crisis."
"It is also alarming that the wording of today's decision of
the Constitutional Court is, according to lawyers, unclear,
incomprehensible and without a prospect for the future."
"I appeal to this institution to take all steps, as soon as
possible, to clarify the situation."
"The (leading centre-right) Civic Democratic Party is
continuing further with its election campaign."
LUBOS MOKRAS, ANALYST, CESKA SPORITELNA
"The delay of early elections is definitely bad news for the
Czech Republic. The interim government does not have strong
enough parliamentary support for bold decisions needed for the
stabilization of public finances."
"The two main parties are apparently not able to overcome
their differences and to cooperate with the interim government.
Protracted uncertainty may adversely affect koruna's exchange
rate and also slow down a recovery in the economy."
PIOTR MATYS, ANALYST, 4CAST
"It seems that the interim government will stay at the helm
for longer than initially anticipated, and if that is the case
it would be favourable if the main political parties changed
their attitude and opted to support Finance Minister Janota's
proposals to significantly reduce the 2010 budget deficit to
around 5 percent of GDP, from the initial target of 7 percent of
GDP."
"Without political support from the main parties, the
interim government has limited room to slash expenditures and
trim the budget deficit."
FIXED INCOME TRADER, PRAGUE
"The announcement came out a little late for today's
trading... There could be some nervousness in markets. There is
still a chance the court decision could come quite soon."
"But this could still have some negative impact on the
budget situation. The more negative it is for the budget, the
more negative for bonds."
JAN KUBACEK, POLITICAL ANALYST, CHARLES UNIVERSITY
"This makes the situation obscure. This totally changes the
timetable for political change and the selection of a new
establishment, a new legislature."
"This changes the authority of the current interim cabinet.
It appears that its mandate will be longer; its responsibility
will be bigger."
"This is happening in a situation of economic problems. The
cabinet will have to be much more active and its role will be
much more significant when it comes to approving the state
budget."
"No one knows how fast the Constitutional Court will discuss
this complaint. It can be expected that it will proceed fast but
still we area talking about weeks, maybe months."
JIRI PEHE, INDEPENDENT POLITICAL ANALYST
"If the election is just postponed, it will still be an
unpleasant complication for the political parties, especially
smaller parties because if this drags on they will run out of
money."
"If the constitutional court has indeed decided to cancel
the elections, it would mean the process would have to start
again and that would really hit small parties above all."
"There are a lot of important decisions put on hold and
waiting for elections, especially with the budget... The parties
will probably have to get together and try to push something
through the parliament before the elections."
"Finally this means we will have the Fischer government of
experts much longer than we expected. Maybe, if it drags on, it
could go on to next year and actually elections could be held in
June when they were supposed to be held."
NEIL SHEARING, ECONOMIST, CAPITAL ECONOMICS
"The most obvious thing it what it's going to mean for
fiscal policy. We've had this spiralling budget deficit which
has gone unchecked due to the impasse in politics, and it was
assumed that it had been left for the new govt to sort out."
"If we're left in political impasse, the budget situation
could get worse."
"My working assumption was that nothing would happen before
elections, and it still looks that way. Any kind of fiscal
consolidation would be delayed, given the fractured nature of
parliament."
"The political chaos and uncertainty at the start of the
year really spooked the markets, but we're in a kind of
different situation and the worst of the fears have receded."
So, we might get a slightly weaker currency and a small
selloff in bonds and equities, but the overall direction of
Czech markets will still be down to global risk appetite."
(Reporting by Jan Lopatka, Jason Hovet, and Michael Winfrey)
