State to pay interest to central bank for euro rescue loan

Prague, Jan 29 (CTK) - The state will pay some 200 million crowns as interests to the Czech central bank CNB if it gives a loan of 1.5 billion euros to the International Monetary Fund for the help to the euro zone, Finance Minister Miroslav Kalousek (TOP 09) told the television station Prima Family yesterday.

It is approximately the sum the CNB would receive if it lent the money at the banking market, Kalousek said.

Kalousek said the exact additional sum could not be specified because interest rates changed.

He said it was evaluated every month and paid for three months.

This year, some 340 million crowns were to be spent on the purpose, but they were unlikely to be drawn in full, Kalousek said.

The centre-right coalition government of the Civic Democrats (ODS), TOP 09 and Public Affairs (VV) agreed on the loan on Wednesday.

President Vaclav Klaus criticised the loan previously.

The CNB governing board approved the loan of 1.5 billion euros, an equivalent of 38 billion crowns, from the foreign exchange reserves to the IMF on Thursday.

However, the bank made it conditional on the approval of guarantees for possible losses.

Bohuslav Sobotka, leader of the opposition Social Democrats, has welcomed the bank's decision to agree with the loan.

The CNB governing board said it would not recommend the provision of another loan to the IMF, but it had taken the promise of state guarantees into consideration in its decision-making.

The Czech Republic was originally to lend 3.5 billion euros to the IMF.

Last December, EU leaders decided at their summit in Brussels that they would give a loan of up to 200 billion euros to the IMF on the basis of bilateral agreements.

However, EU countries eventually did not agree on providing the total sum. Only the euro zone has pledged to give the money, 150 billion euros.

From the countries outside the euro zone, the loan has been refused by Britain and Bulgaria.

($1 = 19.142 crowns)