The United States has abandoned plans to build a tracking radar base in
the Czech Republic. Prime Minister Jan Fischer has confirmed he was
informed of the decision by US President Barack Obama by phone on
night. The United States government says its decision stems from the fact
that Iran's long-range missile program has not progressed as rapidly as
previously estimated. Washington is yet to formally inform Prague.
The radar base was to be part of a US anti-missile defence shield in Europe. In July 2008, Prague signed a treaty with Washington about positioning the facility in central Bohemia. Poland was to host a launching pad with ten intercepting missiles. The anti-missile defence shield project provoked controversy both in the Czech Republic and Russia which viewed it as a security threat.
A multibillion-crown Russian/Czech project for the construction of iron ore mine facilities in western Russia has been suspended due to the economic crisis. Czech companies, namely the Brno metallurgical engineering company ALTA, were to have a 40 to 50% stake in the project, worth 76 billion crowns (three billion EUR). The project envisioned the construction of facilities for iron ore mining and processing.
The national carrier Czech Airlines has begun a long anticipated round of layoffs. The company says that the layoffs will continue gradually until March of next year and currently involve several dozen individuals primarily in technical and administrative divisions. The move is key part of the management’s large-scale plan to restructure the company amid fears it is on the verge of bankruptcy; Czech Airline unions however have been adamant in their opposition to that plan and have threatened to go on unlimited strike.
The Czech minister of foreign affairs, Jan Kohout, said the United States is not abandoning missile defence altogether, but plans to refashion its plan as a joint NATO endeavour. Speaking after a meeting with American officials, Mr Kohout said that the new conception involved a more flexible, more effective and cheaper system that would serve primarily to thwart short- and medium-range missiles targeting any part of Europe. The Czech Republic, he said, would determine its level of involvement in the programme.
The Czech crown reached it strongest point on Thursday since November of last year, briefly trading at less than 25 CZK/EUR and 17 CZK/USD. Trading ended slightly above that mark. According to analysts the current strengthening of the Czech crown is due primarily to an optimistic mood among investors on the global markets and will likely continue for a while. At the same time, a number of economists point out that the strong crown has no basis in the domestic economic situation and they expect the exchange rates to diverge before the end of the year.
Members of the Civic Democratic Party met Thursday with Finance Minister Eduard Janota to discuss the details of his savings measures for the 2010 state budget. As opposed to his original plan, which aims for a 170 billion crown deficit, Mr Janota said he was willing to drop limits on building savings and raise VAT rates by one percent as well as real-estate tax. The VAT increase would apply only for 2010. A spokesman for the Ministry of Finance said that Mr Janota is willing to meet with interested members of all parties to discuss the package.
The Social Democratic Party, which opposed the radar plans, called the announcement a victory for the Czech people and said that the development proved their argument that there was no rationale for a missile defence shield in the Czech Republic. Former prime minister and Civic Democrat leader Mirek Topolánek said that the cancellation of the radar was a direct result of the fall of his government, uncertainty around elections and the perception of the Czech Republic as an unreliable partner. Former foreign minister Karel Schwarzenberg, who signed a bilateral agreement on the radar with the Americans last year, said the decision was intended primarily as an incentive for Russia and Iran ahead of six-nation nuclear talks with Iran planned for October. Spokesman of the No to Bases civic initiative Jan Májíček said that the American administration would have decided differently had both bilateral radar agreements been ratified, and that the active resistance of Czech citizens had prevented that. The No to Bases initiative was to begin a bus tour on Thursday protesting the radar.
Foreign investment in the Czech Republic grew to 10.7 billion dollars in 2008 marking year-on-year growth of 294 million USD, according to a report published by the UN Conference on Trade and Development. The primary investors were the United States (316 billion USD), France (118 USD) and China (108 billion USD). The figures place the Czech Republic as the 32nd largest recipient of foreign investment in the world. Czech companies invested roughly 2 billion dollars abroad last year, ranking the country as the 46th largest global investor.
Politicians have begun responding to Prime Minister Jan Fischer’s call to present their views on prolonging the interim government’s mandate. Civic Democrat leader Mirek Topolánek said his party’s support would be contingent upon the government linking their budget proposal for a reduced deficit to a vote of confidence. Mr Fischer has rejected that condition and instead wants the package read as emergency legislation next week. Meanwhile, support for the interim government sharply divided the Christian Democratic Party on Thursday. Chairman Cyril Svoboda said the party “had no reason” to endorse the government’s mandate on the grounds that it has enough support without the Christian Democrats. He later withdrew the comment.
The head of the Czech Roman Catholic Church, Cardinal Miloslav Vlk has spoken out against this country’s politicians, saying they have led the Czech Republic into a constitutional crisis. He said that for many politicians, the concepts of ‘common good’ and ‘helping society’ were unknown, as the recent political tumult has shown. On his website, the cardinal wrote that selfishness and moral poverty had also been factors behind the recent economic crisis.
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