Czech-Slovak bank swap eases feud

A deal likely to cement over cracked relations between former federal partners Slovakia and the Czech Republic was reached in Prague on October 7 between Czech Prime Minister Miloš Zeman and his Slovak counterpart, Mikuláš Dzurinda.
After seven years of living apart, the two countries appear to have reached agreement on the division of mutual property left over from the 1993 division of Czechoslovakia. The two leaders agreed that the division of the remaining joint assets will be finalised on November 24.


Prime Minister Mikuláš Dzurinda (right) got a 66% stake in Slovak state bank VÚB back from the Czechs in return for a 13% stake in Komerční Banka.
photo: TASR

A deal likely to cement over cracked relations between former federal partners Slovakia and the Czech Republic was reached in Prague on October 7 between Czech Prime Minister Miloš Zeman and his Slovak counterpart, Mikuláš Dzurinda.

After seven years of living apart, the two countries appear to have reached agreement on the division of mutual property left over from the 1993 division of Czechoslovakia. The two leaders agreed that the division of the remaining joint assets will be finalised on November 24.

"I firmly believe that this is a concrete beginning of a final process which will soon lead to the definitive settlement of our relations," Dzurinda said at a press confernce after talks with Zeman.

The two leaders also agreed on an exchange of shares between the Czech financial house Komerční Banka and Všeobecná Úverová Banka, Slovakia's largest bank. Slovakia will hand over its 13% stake in Komerční, while the Czechs will give up their 66% share of VÚB. No extra compensation will be required. Both banks are slated for privatisation by their respective governments.

This was the first ever official visit paid by the Slovak Prime Minister to the Czech Republic. Dzurinda's predecessor, Vladimír Mečiar, never got around to visiting the former sister-country at an official level.

Dzurinda arrived in Prague for his two-day visit accompanied by his wife and a group of state officials, including Deputy Prime Minister for Economy Ivan Mikloš, Foreign Minister Eduard Kukan, Economy Minister Ľudovít Černák, Defence Minster Pavol Kanis, National Bank Governor Marián Jusko and National Property Fund President Ľudovít Kaník.

Dzurinda also met with Czech President Václav Havel. He praised Havel's role in the November, 1989 dethroning of the communist government in former Czechoslovakia.

"We might now have different political views on the past, but we all have a chance for the future because you and others managed to oust communism," presidential spokesman Ladislav Špaček quoted Dzurinda as telling Havel at the meeting.

Havel, for his part, assured Dzurinda of the Czech Republic's support for Slovakia in its efforts towards Euro-Atlantic structures.

Czech and Slovak relations remained cold under the governments of Vladimír Mečiar and Václav Klaus, and were dominated by squabbles on how to divide the former joint property.

Relations began warming last November during Zeman's visit to Bratislava following the swearing-in of the Dzurinda government. At that time, the two prime ministers pledged to solve all disputes between the two countries within 12 months.

Since December 1998, when a joint commission for the division of Czechoslovak property was formed, state officials of both countries have met several times to discuss problematic debt settlement issues.

One of the thorniest debt issues has been the Czech claim that Slovakia owes it 29 billion Czech crowns ensuing from the division of the assets and liabilities of the former Czechoslovak State Bank (ČSSB). The Slovak side has never recognised the debt, a refusal which prompted the Czech side to freeze five tonnes of Slovak gold from World War II in the safes of the Czech National Bank.

Another stumbling block has been the division of mutual stakes in former Czechoslovak state companies. Altogether, the National Property Funds (privatisation agencies) of both countries own stakes in over 65 previously common state companies which are now scheduled for privatisation.

In the past, both Dzurinda and Slovak President Rudolf Schuster repeatedly advocated a "zero alternative" for property division, meaning that each country would simply drop its claims on the other. The Slovak vision, however, has been flatly refused by the Zeman cabinet.

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