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Current AffairsOpposition Civic Democrats will strive to bring down government
The strongest opposition party in Parliament, the centre right Civic
Democrats have declared their intention to try to bring down the
three-party coalition government and trigger early elections. The public
announcement made by the party's leader Miroslav Topolanek, comes in the
wake of a fresh blow for the governing coalition: one of its deputies
broke ranks on Tuesday, seriously endangering the government's razor thin
majority in the Lower House.
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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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Press ReviewPress Review
Two stories dominate Wednesday's front pages: the killing of Saddam
Hussein's two sons by United States forces in Iraq, and the threat to the
governing coalition posed by the surprise resignation of Josef Hojdar from
the Social Democrats' group in the Chamber of Deputies.
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Current AffairsCoalition government reels under new blow
As the Lower House prepared to debate the government's fiscal reform
package on Tuesday, a deputy for the ruling Social Democratic Party let
off a bombshell. He announced that he was leaving his party's deputies
group and might not support the crucial reform package all the way. For a
government with a razor thin majority in the Lower House this news could
mean the end of the road.
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Current AffairsThe government faces a new test: pushing through public finance reform
Regardless of the final outcome July will be remembered as a month in which
the government once again put its political future on the line. After a
turbulent year that saw the fragile coalition weather discord over a
proposed tax hike, and further disunity during presidential elections, the
government has now rested its future on the passing of its public finance
reforms, a process that begins today expected to culminate in September.
This time: have coalition members agreed to agree? Or will the government
fail from within, eventually facing embarrassing defeat?
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Current AffairsShadow defence minister expects further budget cuts and introduces his own military reform plan
The Czech defence sector is in dire need of reform. The Defence Ministry's
plan to transform the Army into a fully professional one has been dealt a
heavy blow by the government, which has drastically cut defence spending
as part of an attempt at reducing the state budget deficit and reforming
public finances. As a result, Defence Minister Miroslav Kostelka has come
up with a new reform plan, which calls for soldiers to be laid off and
army bases to be closed down. Steps that shadow Defence Minister Petr
Necas says do not go far enough, given that more defence budget cuts can
be expected. Dita Asiedu reports:
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Current AffairsCzech government plans to lure skilled workers from the East
The Czech Cabinet is launching a long term project which should address the
negative demographic trend in the Czech Republic - an aging population and
a low birth rate. According to statistics, the Czech Republic, whose
current population is just over ten million, will lack a total of 420,000
skilled labourers in twenty years' time.
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Press ReviewPress Review
The dailies offer quite a mix of stories with none clearly dominating the
front pages. MLADA FRONTA DNES leads with today's government meeting
expected to reduce corporate tax and state support for deposits in
building societies. The paper says that more than five million Czechs have
savings in building societies and the state contributes 4,500 crowns or
150 euros each year to every one of them.
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Current AffairsCabinet approves framework agreement for reform
The Czech Cabinet on Wednesday approved a framework agreement for reform,
which aims to cut the public finance deficit to four percent of GDP by
2006 - a move that is crucial for the country's future in the European
Union. However not everyone is happy with the plan. While the opposition
Civic Democrats see it as being too moderate, trade unions have taken to
the streets to protest against the spending cuts the plan will entail.
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Press ReviewPress Review
Today's newspapers offer different opinions and prognoses of the trade
union protests in Prague against the government's reform of public
finances. MLADA FRONTA DNES warns that the protests and threatened strikes
will not succeed, and quotes the finance minister, Bohuslav Sobotka, who
has rejected any negotiations about the reforms, which he describes as
optimal and necessary.
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