Central Bohemia region at centre of row over massive fixed rate loan

The Central Bohemia region is at the centre of a row over a massive loan taken out at a high interest rate.

A 6.0 percent interest rate was attached to the 1.8 billion crown loan taken out in 2008. Under the terms of the loan, the interest rate cannot be changed over its 20 year term.

The loan was taken out to pay for three new hospitals and was signed at the time by the then regional governor Petr Bendl of the Civic Democrats. The current regional governor, Jaroslava Jermanová, of ANO, was deputy of the financial committee that cleared the loan.

The loan, judged by experts to be far above the normal commercial rate, has been justified as hedging against interest rate increases. Bendl said the move was advantageous.

Author: Jan Velinger