Reaping the benefits of strong policies
Overview:
At a time when the Euro zone is in crisis and many European Emerging Markets are struggling, the Czech Republic has proven to be an island of stability. Strong economic policies (small fiscal and external account imbalances) meant that the country was well placed to ride out the global economic crisis and it is now rebounding solidly. The new centre-right government has won considerable credit in the financial markets for its commitment to fiscal retrenchment and the implementation of economic reforms. This and the fact that the coalition also has a strong position in parliament have seen Czech financial markets outperform most of their peers in the region. The government’s popularity is being hit as tough measures are implemented but developments elsewhere show there is little real alternative.