Czech Republic: according to Trexima, the company monitoring salaries, more than 62 per cent of employees have below average wages. The lowest wage in the Czech Republic in 1997 was 33.5 crowns (US$1) per hour, while the highest wages were up to a thousand crowns per hour. The highest wages were registered in mixed or foreign companies, and in the sectors of telecommunications, postal services and real estate.

On 1 April the Finance Ministry confirmed that the State budget had a 7.6 billion crown ($225.5 million) surplus in the first quarter of 1998, with budget revenues at 123.5 billion crowns and expenditures at 115.9 billion crowns.

The Ministry of Industry and Trade reported that trade with the EU reached 961.8 billion crowns ($28.6 billion) in 1997, accounting for 61.3 per cent of the total Czech trade turnover. The Czech's exports to the EU were worth 430.5 billion crowns, up to 24.3 per cent over 1996, while imports from the EU amounted to 531.3 billion crowns, 13.2 per cent higher than in 1996. The main trading partners were Germany, Slovakia, Austria, Poland and Italy.

Estonia: in 1997, FDI per capita rose three times from 1996, amounting to $87 compared with $26 in 1996, confirmed Juri Sakkeus, Director of Estonian Investment and Trade Development Foundation.

Hungary: the Central Statistical Office announced that Gross Domestic Product (GDP) in the last quarter of 1997 rose by 5.3 per cent over the same period of the previous year. The real GDP growth for the whole of 1997 was 4.4 per cent, with an industrial sector which shared ten per cent growth in the GDP's growth.

Latvia: on 1 April, Einars Repse, President of the Bank of Latvia said the consolidated audited profit of Latvian commercial banks was about 45 million lats ($75 million). Twenty-eight banks were profitable and four banks incurred a total loss of 3.5 million lats.

On 31 March the Latvian Government passed a resolution regarding the allocation of state funds totalling 43.1 million lats ($71.8 million) for investment projects in 1998. The State will also extend guarantees for investments of 38.4 million lats and loans worth 42.9 million lats.

Lithuania: the Lithuanian Government has introduced a new excise tax on tobacco, alcoholic beverages and petrol, to be in effect from 10 April. Funds from the taxes will be used for social programmes. Of these funds, 150 million litas will go towards the increase of salaries of the employees in the State budget sector.

Poland: Leszek Balcerowicz, the Polish Finance Minister, said that on 31 March, the Cabinet adopted a bill to make the zloty almost fully convertible for most types of transactions.

According to the bill, which is expected to be approved by Parliament and come into force this year, the zloty can be freely used for settlement of foreign trade transactions. The zloty will be quoted and traded by banks of OECD countries. Only short-term capital flows will not become fully liberalised.

The National Bank of Poland (NBP) reported that the foreign trade deficit amounted to $11.269 billion in 1997, $3.115 billion more than in 1996. Exports stood at $27.229 billion, up 11.5 per cent from the previous year. Meanwhile, imports were valued at $38.498 billion, 18 per cent over the 1996 figure. The report also confirmed that the gross reserves stood at $20.670 billion at the end of 1997, $2.637 billion higher than at the same time in 1996.

Slovakia: Moody's Investors Service downgraded the investment rating for Slovakia from Baa3 to Ba1/NP. They stated that the reason for the move was the persistent deficit on Slovakia's current account of the balance of payments and the state budget deficit, which has been increasingly financed by foreign borrowings. The foreign currency bonds and treasury bills of the Slovak Republic, the National Bank of Slovakia's bonds, along with the state guaranteed bonds of the Vodohospodarska Vystavka company, were given a Ba1 rating. Meanwhile, foreign currency deposits in Slovak banks dropped to Ba2.

Central Europe: RWE, the German electricity and industrial conglomerate based in Essen, is planning to expand its telecommunications activities into Central Europe, where it has significant energy interests. The group confirmed it is looking for partners to join it in a fixed network telecomms venture in Hungary. RWE already has a 40 per cent share in Aliatel, a joint telecomms venture in the Czech Republic.

Czech Republic: Skoda Plzen, a large engineering company, reported a preliminary 1997 loss of 1.8 billion crowns ($53.4 million). Ivo Novak, Financial Director of Skoda Plznen, said that high losses are due to high interest rates on financial transactions.

CS-Zivnostenska Pojistovna, the seventh largest insurance company, has reported an audited loss of 366 million crowns ($10.9 million) for 1997. However, the company is planning to make a profit of 30 million crowns this year, and hopes to get a higher share in the insurance market.

Hungary: Minister of Transport, Telecommunication and Water Management, Karoly Lotz, officially formed a second telecommunication company, Pantel Rt, breaking the monopoly held by Matav Rt. Majority shareholders in the new venture are the Dutch telecomm company, Unisource, which bought 49 per cent for $50 million, and two Hungarian companies, the State Railways, and MOL Rt. oil and gas company, with 25.1 and 20.9 per cent stakes respectively.

Fotex Rt, the retail company, is to issue a total of 3,614,970 new shares at a nominal value of 100 forints ($0.5) through the private placement of its President, Gabor Varszegi. The company will also withdraw an equal amount of shares from its own portfolio. The placement will take place between 1 May and 20 June.

Latvia: Rietumu Banka, one of the four largest banks in Latvia, reported a net profit of 8.3 million lats ($13.8) for 1997. The profit will be used to increase the Bank's share capital.

The general meeting of shareholders of Parex Banka decided to invest its 1997 net profit of 9.1 million lats into the Bank's equity. The Bank's capital and reserves were 32.5 million lats ($54.2 million) at the end of 1997.

Rigas Komercbanka announced the increase of its capital by 186,299 lats to 11.758 million lats ($19.6 million), through the issue of the six closed issuance of shares. The shares of the Bank will be quoted on the Riga Stock Exchange from 14 April. The Bank reported a net profit of 2.054 million lats in 1997.

Lithuania: Bankas Snoras, one of Lithuania's largest banks, decided to increase the Bank's share capital by 34 million litas ($8.5 million), by issuing 3.37 million shares with a face value of ten litas. The new shares will be projected for the first half of this year. Bankas Snoras earned 1.088 million litas net profit in 1997, of which 1.059 million litas will be paid out in dividends and the remaining will be allocated for reserve capital. Seventy-three per cent of Banka Snoras is owned by private individuals, while foreigners hold 21-22 per cent.

On 31 March, following the decision of existing shareholders, Vilniaus Bankas, the largest private commercial bank, will issue a new 80 million litas share emission, partly distributed in the form of a GDR. Raimondas Kutra, Vice-President of the Board, said that the capital increase will be used for the expansion of the Bank's national and foreign operations. CS First Boston has been selected as a manager of the new issue. Kutra also confirmed that the issue will be the largest equity issue in the Baltic States.

Poland: Bank Wlasnosci Pracowniczej SA, a small commercial bank in the Gdansk region (northern Poland), will sell a new share issue to four foreign investors in the second quarter of this year, said the President of the Bank, Kazimierz Glowacki. Unibank A/S, the second largest Danish bank, will buy shares worth four million dollars. The International Finance Corporation, Poland's Partners, will acquire shares worth two million dollars each, and the Danish Investment Fund will pay one million dollars for its stake in the Bank.

Bank Handlowy SA, one of the largest banks in Poland, announced that it will pay 130 million zlotys ($38 million) in dividends to its shareholders. The Bank reported an 8.9 per cent increase in net profits for 1997 over 1996, which amounted to 577 million zlotys ($169.7 million). The Bank expects the 1998 growth in profits to total 611 million zlotys.

Kredit Bank PBI SA held an extraordinary general meeting and decided to issue 4.9 million shares, which will be distributed to employees and board members. The new share issue will increase the Bank's share capital to 24.5 million zlotys ($7.1 million), confirmed the Bank's spokesman, Marcin Olkowicz. The extraordinary meeting also decided to approve Andre Cardoso de Menezes Navarro, the Director of the Foreign Department at the Espirito Santo-Lisbone Bank, and Stanislaw Gutek, the President of Polisa SA, the insurance company, as new members of the Bank's board. The Portugese bank is one of the major shareholders of the PBI. The move is linked with the Bank's diversification to the insurance sector.

Eleven foreign steel concerns offered to participate in a formation of a company in Dabrowa Gornicza, Poland. The company will be designed to build an installation for integrated sheet casting and rolling at the steelworks. The companies involved in the formation are British Steel, Thyssen Krupp and Voest Alpinee, and Katowice SA steelworks. The projected investment will range between $450 to $500 million over the next four years.

Gdansk Refinery, the oil company which is soon expected to be privatised and floated on the Warsaw Stock Exchange (WSE), reported a net profit for 1997 of 84 million zlotys ($24.7 million), 82 per cent more than in 1996. It is expected to make 130 million zlotys ($38 million) profit in 1998, said the company Financial Director, Stanislaw Pokojski. In 1998 and 1999 the Company plans to issue bonds worth 273 million zlotys and hopes for credit worth 255 million Swiss francs ($113.3 million) from a consortium of Polish and foreign banks. This will finance further investment. Pokojski said that in 1997 Gdansk Refinery's investment reached 264 million zlotys, as part of a 1.8 billion zloty investment programme. This is three times more than in 1996.

The paper plant, Szczecin-Skolwin SA, plans to find a strategic investor to help its re-structuring programme and to make necessary investments before listing on the WSE in the year 2000, said Jacek Pietryka, the company's President. The plant produces newsprint, wrapping and coating paper, wax, aluminium foil and toilet paper.

KGHM Polska Miedz, Poland's listed copper company, accounts for 3.5 per cent of the world copper production. On 30 March the Solidarity trade union at Rudna, the largest copper ore mine in the company, called a strike to halt the re-structuring programme aimed at cutting costs. The KGHM re-structuring strategy is crucial to maintain the company's profitability in the face of weak world copper prices. The strike decision was announced after a ballot last week. (FT 31/03/98)

Estonia: Raivo Vare, the Minister for Roads and Communications, announced that the sale of the state's 49 per cent stake in the Eesti Telekom telecommunications company will have a form of GDRs, ten per cent of which will be listed on the Tallin Stock Exchange and the rest on the international markets.

Poland: a poll which covered 24 of the 35 brokerage house members of the WSE confirmed that foreign investors accounted for 38 per cent of the stock trades in 1997. This is an increase of 32 per cent from 1996, with the trend forecast to continue to 50 per cent by the year 2000.

On 30 March the new investment fund, Forum Zachodnie Towarzystwo Funduszy Powierniczych SA, began operations. With three investment funds, Olimp, Sfinks and Dragon, it invested in Polish stocks and bonds. The new fund is formed by the Bank Zachodni SA, which holds 51 per cent of the fund, and the US company Forum Financial Group, one of the ten largest US fund managers.

Poland: Jacek Cesarz, President of the National Investment Funds (NIF) Association said that 130 of 512 companies owned by the NIF were privatised by the end of 1997. The receipts from privatisation amounted to 1.5 billion zlotys ($440 million), of which 500 million zlotys were invested in investment portfolio and 200 million were invested in 26 companies owned by NFIs.

Armenia: Robert Kocharian, the Acting President and a nationalist, was confirmed as winner of the presidential elections. He achieved a 20 per cent point margin, gaining 59.33 per cent of the votes against the former communist party leader, Karen Demirchyan. Demirchyan received 40.67 per cent of the votes.

Czech Republic: general elections were set by President Vaclav Havel for 19 and 20 June. Due to an amendment to the constitution, limiting the term of the present Government to two years, the present parliamentary term will end on 30 June.

Romania: on 30 March, Victor Ciorbea, Romania's Prime Minister, resigned in an effort to end the country's deepening political crisis. This halted many weeks of bitter fighting between rival parties in his 16 month coalition Government. Radu Vasile, an economist and Secretary General of Romania's National Peasants' Party, was nominated as the next Prime Minister. Vasile is expected to form a Government from the parties that formed the previous coalition, including the Liberals, the ethnic Hungarian Alliance and the Democrats.

Russia: Boris Yeltsin confirmed that he would not run for a third term as President. However, he also made it clear that Viktor Chernomyrdin, who has been Prime Minister for the last five years, could not count on the Kremlin's support to replace him. He said that it was his decision to "sack the Government ". Yeltsin stated that the lower house of the Russian Parliament, the Duma, would support his nomination of Sergei Kiriyenko as the new Prime Minister, when he voted on his candidacy on 27 March.

Slovakia: according to the latest poll conducted by the Institute for Public Affairs in March, 52 per cent of Slovak÷s will vote against the Prime Minister, Vladimir Meciar, becoming President in the third round of the presidential elections on 16 April. Slovakia has been without a President since 2 March, when former President Michal Kovac's five year term expired.