The fragile state of governments in new EU member states is emerging as a major obstacle to the region finishing off the privatization process launched following the fall of communism 16 years ago.
Despite several big sell-offs in sectors such as airlines, finance and utilities that are still to be completed, the current political weakness of governments -- in particular in the Czech Republic, Poland and Hungary -- combined with the widespread unpopularity of privatization, appears to have pushed the issue onto the back burner in many nations.
"Political weakness is a a major hindrance to privatization," said Lars Christensen, emerging markets analyst with Danske Bank in Copenhagen.
At the same time, signs of softer equity markets have also helped to dampen the enthusiasm among governments for pressing on with privatizations when the return might be lower than what they had hoped for.
Last week Poland called off holding a tender for an adviser for the privatization of key insurer PZU, raising doubts as to when Warsaw will proceed with what was seen as one of the biggest sell-offs this year.
Poland is already in the grip of moves towards a national election, which could mean that highly-charged political issues such as restructuring the country's coal mining sector, along with its huge financial burden of liabilities and debt, are now likely to handed over to the country's new government.
This leaves the Czech government's sale last week of its 51 percent stake in Cesky Telekom as likely to be one of the key sell-offs for the year.
NO FORWARD MOVEMENT
"There are some sell-offs but privatization is not really going forward," Christensen said. "There is no real popular support for privatization."
Even then Prague's sale of the holding to Spain's Telefonica for US$3.59 billion was held as Prime Minister Stanislav Gross' ruling coalition faced collapse.
Further underscoring the political uncertainty facing the nation, Gross's minority left-center government went on to survive a parliamentary vote of no-confidence only after several deputies including the bloc of communist representatives abstained from voting.
"The political cycle has been by no means helpful," said Michael Dybula, emerging markets strategist with BNP Paribas in Warsaw.
However, political pressures are not the only forces acting against governments moving ahead with privatizations. Last week Hungary's state privatization body announced that it had again failed in sell off the nation's flag carrier Malev because, according to Hungarian press reports, of the reluctance of bidders to takeover the loss-making airline's debt.
Analysts point out however that a decade after the round of sell-offs across Central and Eastern Europe (CEE) as governments embarked on dismantling their nations' command economies, the number of candidates that can be lined up for privatization has shrunk considerably, with the state share of the economy having dropped significantly in recent years.
Moreover, the scale of the privatization which took place across the region in the early years following the fall of communism means that the companies now on the sell-off list are often in highly politically sensitive areas.
"It is harder to privatize now than it was five or 10 years ago," Christensen said.
This is despite the pressure on many CEE governments to knock their public finances into shape in the hope of merging their currencies with the euro, possibly by the turn of the decade. Selling off the remaining utilities presents more risk of a political backlash for governments than the privatizations that have already taken place in sectors such as telecoms, banking and manufacturing.
"Everybody is paying an electricity bill so it is a sensitive question," Dybula said.
Selling off utilities also raises complicated issues such as how a privatized utilities sector should be regulated.
But with the numbers of mergers and acquisitions across the CEE increasing sharply, the competitive pressures unleashed by nations such as Poland, the Czech Republic, Slovakia and Hungary signing up for EU membership last year may have resulted in companies already starting to move into a new phase of consolidation.
Since COVID-19 broke out in Taiwan, there has been a fair amount of news regarding discrimination and “witch hunts” against medical personnel, people under self-quarantine and other targets, such as the students of a school where an infection was discovered. Quarantine breakers are almost certainly on the loose and it is only natural for people to be vigilant. One in Chiayi was found by accident at a traffic stop because his helmet was not fastened. However, those who follow the rules by quarantining themselves should be encouraged to keep up the good work in a difficult situation, instead of being
Chinese Nationalist Party (KMT) Legislator-at-large Wu Sz-huai (吳斯懷) has said that there is a huge difference between Chinese military aircraft circling Taiwan along the edges of its airspace and invading Taiwan’s airspace. He also said that whether it is US or Chinese aircraft flying along or encircling Taiwan’s airspace, there is no legal basis to say that such actions imply a clear provocation of Taiwan, and asked the Ministry of National Defense not to mislead the public. People who hear this might think that it is not a very Taiwanese thing to say. US military activity in the vicinity of Taiwan
As the COVID-19 pandemic spins out of control, many parts of the world are experiencing shortages of medical masks and other protective equipment. I am studying in Washington state, which at the time of writing is the US state that has suffered the largest number of deaths from the novel coronavirus. The week before last, UW Medicine — an organization that includes the University of Washington School of Medicine and associated medical centers and clinics — sent its volunteers an e-mail asking the public to make masks and donate them to hospitals. Attached to the message was a mask donation
Among the three core competencies in the 12-Year Basic Education Curriculum Guidelines, “independent action” is perhaps the most important. However, if a teacher’s approach to teaching follows the Nine-Year Educational Program model, independent action and independent learning seem to be a long-term goal and not a top priority. Fortunately, as a result of the COVID-19 pandemic, the start of school was postponed by two weeks, and the government has been pushing for online teaching. Teachers and students are beginning to focus on independent learning, making this a topic of discussion in educational circles. During the two-week delay, teachers and students at a