The Czech Republic has not yet been hard hit by the global financial crisis, but its economy will slow next year, suggested the International Monetary Fund in a report published Monday. The IMF predicted that the Czech economy would grow by less than two percent in 2009, down sharply from the previous forecast of four percent. In 2007, the economy expanded by a record 6.6 percent. Subhash Thakur, head of the IMF’s mission in the Czech Republic, said the economy was well protected against the crisis by its solid growth in recent years, a strong currency and recent public finance reforms.
The head of the Czech army Vlastimil Picek has urged the government to highlight the overlap between some EU and NATO military missions during the Czech Republic’s presidency of the European Union starting in January next year. Mr Picek said on Tuesday that small countries such as the Czech Republic found it difficult to bear the financial burden of participating in two missions in one country, and urged Czech Defence Minister Vlasta Parkanová to attempt to restructure some of the EU’s defence activities during the country’s six months at the helm. For her part, Mrs Parkanová said that she would be focusing on widening some of the EU’s foreign missions during the Czech EU presidency – in particular, the defence minister said she aimed to fortify the EU’s presence in Afghanistan. In response to Mr Picek’s request, the defence minister said the Czech military budget would be raised next year by 1.5 billion crowns to nearly 55.5 billion crowns (2.9 billion USD).
In related news, the head of the Economic and Monetary Affairs Committee of the European Parliament, Pervenche Beres, has said that the Czech government could speed up economic reform by adopting a timetable for euro introduction. Speaking on a visit to Prague, Mrs Beres said that implementing a timetable for euro adoption would in turn place an added onus upon reforms being passed. The MEP also emphasized the importance of the common European currency in the current financial crisis, calling the euro an ‘anchor’ stabilizing the economies of countries in which it was used.
A 22-metre-high Christmas tree was erected on Prague’s Old Town Square on Monday night. The tree will be illuminated on Saturday evening, at the opening of the Christmas market to be held on the square. The spruce tree came from the Krkonoše Mountains in the north of the country, and will be one of the most visible symbols of Christmas in the Czech capital. Organisers of the market said that they had taken special care to anchor the tree firmly into the ground after six people were injured in 2003, when the tree blew over in high winds.
The Czech Constitutional Court has opened its hearing to determine whether
the EU’s Lisbon treaty complies with the country’s own constitution. No
decision, however, has been reached after the first day of proceedings,
with the session adjourned until Wednesday morning. The Czech Republic,
which takes over the EU’s rotating presidency on January 1 next year, is
the only member state not to have started the ratification process. On
Tuesday morning, Czech President Václav Klaus, a fierce opponent of
Lisbon, made a statement in court arguing the document is not in line with
Czech law. He urged Czechs not to push through the treaty on the basis of
what he called ‘foreign pressure and the short-term interests of several
Czech politicians’. On Monday, the Czech president suggested that he
would not sign the Lisbon treaty until it had been ratified by Ireland.
The Deputy Prime Minister for European Affairs Alexandr Vondra represented the government in Tuesday’s court session; he disagreed with the president, calling the Lisbon treaty an ‘acceptable document’ for Czechs. The court adjourned at around 12:00 CET, with officials saying a decision would be made on Wednesday.
The ruling Civic Democrats have called for deputies to hold an extraordinary meeting after MPs failed on Tuesday to agree upon an agenda for their last gathering for 2008. After two hours of discussion, MPs were still unable to reach a consensus and the proposed agenda was vetoed. With next year’s budget and the future of several foreign military missions still to be debated, the Civic Democrats have called for the Lower House to meet extraordinarily on up to three occasions before the year is out. The first of these meetings is tabled to take place next week. MPs’ failure to agree upon an agenda sparked ire on Tuesday, with the leader of the Greens, Martin Bursík, calling the situation ‘almost inexcusable’ and ‘extremely serious’.
In more business news, the Czech Republic will not decide upon a date for introducing the common European currency until next year, the national coordinator for euro adoption, Oldřich Dědek, has said. Last week, the governor of the Czech National Bank Zdeněk Tůma also indicated that the debate on euro adoption should be postponed until next year. Exporters such as Škoda Auto have been urging the government to lay out a roadmap towards euro adoption as quickly as possible. On Tuesday, Oldřich Dědek said he first wanted to see how the euro weathered the current global financial crisis. It looks increasingly unlikely that Czechs will adopt the single European currency before 2012 at the earliest.
The leading Civic Democrats suffered a humiliating defeat in last month’s regional elections mainly because they lost the support of middle-class voters, a study conducted for Mladá fronta Dnes suggests. Researcher Daniel Kunštát said that the Civic Democrats failed to secure the votes of those earning average and slightly-above-average incomes, both groups which traditionally tend to vote for the centre-right party. The survey suggested that losses were highest amongst teachers, healthcare workers and civil servants, while those who earned on average above 40,000 crowns (just over 2,000 USD) a month remained faithful to the Civic Democrats.
Directors of the Simon Weisenthal Centre – an international Jewish human rights organisation – have written to the Czech Interior Ministry regarding riots recently held by neo-Nazis in north Bohemia. The organisation’s head of international relations, Shimon Samuels, wrote in a letter that when all Czechs are ‘children or grandchildren of the victims of totalitarian regimes’ it is ‘incomprehensible’ that a minority, this time the Romany, are being attacked in such a way on Czech soil. Mr Samuels added that the way the government now deals with the riots will prove a ‘litmus test’ which will set the tone for the country’s upcoming EU presidency. Mr Samuels voiced his concern that members of the Czech Republic’s military and police force were reported to have been involved in the riots.
The Czech Constitutional Court is expected to rule at a public hearing on Tuesday on whether the Lisbon treaty is in line with the Czech constitutional order. A positive ruling could unfreeze the ratification process in Parliament, while a negative result could seriously complicate matters, since Parliament would first need to change the constitution order. Even in the event of a positive ruling, the prime minister has expressed serious doubts that the treaty could be ratified in time for the Czech Republic’s EU presidency starting January 1st.