Czech Republic Threatened of Downgrade

Politics ♦ Published: September 14, 2012; 18:32 ♦ (Vindobona)

Because of its instable political situation, the Czech Republic may be downgraded. Debt service costs may increase substantially.

Czech Republic Threatened of Downgrade / Picture: ©

According to CTK, the Czech Republic is endangered of a downgrade of its sovereign debt ratings. The downgrade by one notch would cause an increase in interest costs by € 390m.

Last week, the Czech Parliament rejected the austerity package by the government. The package includes an increase of the VAT rate, which is highly controlversial. Besides the VAT increase, he austerity…