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Trade Unions have been stepping up their protests against fiscal reforms
planned by the government. Central Bank governor has encouraged the
cabinet to go ahead with the reforms. Meanwhile, the Ministry of Finance
said the Czech Republic will show the biggest fiscal deficit in its
history this year. The dominant Czech telephone operator, Czech Telecom,
will lay off 1,800 workers by the end of the year. The Czech foreign trade
balance fell into a higher than expected deficit in July. Every tenth
Czech household defaults on its loans.
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Press ReviewPress Review
The first ever trial of a left-wing radical commands a great deal of
attention since a regional court in North Moravia is now expected to set
an important precedent - can people be jailed for propagating communism?
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Business NewsBusiness News
Prague blue-chips hit a three-year high earlier this week. Meanwhile, the
Czech crown fell to its lowest in over a year and a half against the euro.
The Czech central bank will most likely change its inflation targeting
policy. New Telecommunications Act forces former monopoly Czech Telecom to
rent last mile to competitors. Czech Telecom to sell off some assets. The
largest Czech coal-burning power station out of operation. Power Utility
CEZ eying mulls eastward expansion. Sixteen buildings in Prague's
Wenceslas Square are up for sale again.
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Press ReviewPress Review
The Pope praying for rain, a Greenpeace protest at a Czech chemical
factory, and Czech soldiers on guard against angry mobs in Iraq - all
feature prominently on today's front pages. MLADA FRONTA DNES has pictures
of Czech troops standing near burning tires, the result of local Iraqi
unrest on Sunday. In several incidents Czech soldiers received minor
injuries from stones thrown by local inhabitants. Worse was an incident in
which one Iraqi man - attempting to jump a vehicle leaving the Czech base
- slipped under the wheels and later died from his injuries.
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Business NewsBusiness News
In this week's Economics Report, the failing Fischer travel empire looks
for salvation, the government is to try again to persuade the EU to allow
a bailout for Trinecke Zelezarny, and the Labour Minister wants to retain
the so-called "13th and 14th salaries" despite plans to cut the
public spending deficit.
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Letter from PragueSummer's getting hot
It's been an extremely hot summer here in the Czech Republic. Well, the
older generation would say just another hot summer - only young skeptics
talk about a possible climate change. Many enjoy the amount of sun we've
been having, but for others, it is yet another reason to complain about
their plight - such as farmers who never fail to be surprised by the
seasonal changes in the weather, and are always demanding compensations
from the government for what other entrepreneurs have to take as business
risk. Nevertheless, the farmers only add to the countless hands stretched
towards the treasury.
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Press ReviewPress Review
"Prime Minister Spidla wins first battle", that's how today's
papers describe the approval of a package of government-proposed public
finance reforms by the Lower House. The cabinet has pegged its future on
parliamentary approval of the reforms. But, as the papers point out, this
was only the first out of three readings.
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Business NewsUncertain future of fiscal reforms weakens Czech koruna
This week, Czech lawmakers started debating a package of fiscal reforms as
proposed by the centre-left government of Prime Minister Vladimir Spidla.
Mr. Spidla has staked the future of his three-party coalition cabinet on
the success of the reforms which are vital for cutting a widening public
finance deficit to meet the Maastricht criteria for euro adoption.
However, the government has only the tiniest majority of one vote in the
Lower Chamber. Some coalition MP have already voiced their objections to
the shape of the reforms and suggested they may seek alterations to some
of the dozen or so bills, combining tax hikes with wage freeze in the
state sector and cuts in social welfare. Although the reform has been
criticised from both right and left for being either too mild or too
radical, pundits agree that it is a step in the right direction. However,
the uncertain future of the reform package and fears of potential collapse
of the government has had a negative impact on the Czech currency, which
fell to 32.40 to the euro, its weakest level in a year and a half. I
discussed this and other aspects of the current uncertain situation with
economic analyst Vladimir Pikora from the Prague branch of Volksbank.
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