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Klaus Prognosis On Czech Republic:'Stability And Growth'

Prague, March 19 (RFE/RL) -- Czech Prime Minister Vaclav Klaus says he will shut down the country's Privatization Ministry in June, following parliamentary elections.

Speaking to an international forum of banking and financial leaders at RFe/RL's Prague headquarters today, Klaus said: "We don't think there will be a need for the Ministry of Privatization after the first half of 1996."

Klaus said the "transformation privatization" in the country is now complete and that there are only some "residual" cases where state shares in firms need to be transfered to the private sector.

Klaus also said that despite the upcoming elections, his cabinet did N-O-T intend to "inflate the economy" by funding unnecessary social programs. He said the prognosis for the Czech economy was "growth and prosperity" and that, with a balanced budget, "populist gestures" were N-O-T necessary.

He said the Czech Republic's unemployment rate of 3.1 percent, one of the lowest in the world, was one of the most worrying economic indicators for the Czech republic. He said that while the "social side" of the low rate was positive in the immediate term, the tight labor market made it difficult for new businesses.

Klaus said he considers the country's annual inflation rate of 8.6 percent to be very high because "our eyes are turned to Western Europe and not to the post Communist world," where such a rate would be considered relatively low.

Klaus also said the Central European Free Trade Area (CEFTA) intends to invite all three Baltic states into the group as observers this year.