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Czech National Bank cuts interest rates by half a percentage point

The Czech National Bank has cut interest rates by half a percentage point. The cut, which analysts had expected, leaves the main two-week repo rate at 2.25 percent. Speaking on Wednesday after the move was announced, the deputy governor of the central bank, Miroslav Singer, said it had been made because of a fall in demand in developed countries, which influences inflation in the Czech Republic. Six weeks ago the Czech National Bank cut interest rates by three-quarters of a percentage point.

Sarkozy attacks Klaus over refusal to fly EU flag and meeting with MEPs

The French president, Nicolas Sarkozy, has attacked the refusal of the Czech president, Václav Klaus, to fly a European Union flag over Prague Castle during the Czech Republic’s upcoming presidency of the EU. Speaking at the European Parliament, Mr Sarkozy also criticised Mr Klaus’s behaviour during a recent meeting with a delegation of senior MEPs in Prague. Those talks ended in acrimony when the MEPs tried in vain to present the euro-sceptic Mr Klaus with an EU flag. For his part, President Klaus described the French president’s comments as “really undignified”. The Czech Republic assumes the six-month rotating presidency of the EU on January 1.

Social Democrats increase lead in CVVM poll

A new poll suggests the opposition Social Democrats have pulled further ahead of the governing Civic Democrats in terms of public support. An opinion poll carried out this month by the CVVM agency indicates that 44.5 percent would vote for the Social Democrats, compared to 27 percent support for the Civic Democrats. In November the gap was 1 percent narrower. The Communist Party ranked third in the December survey with 14 percent backing. The Social Democrats made significant gains on the Civic Democrats in regional and Senate elections in October.

Opposition leader expects deal with government on EU presidency before Christmas

The leader of the Social Democrats says he believes a deal with the government aimed at ensuring the Czech Republic’s EU presidency runs smoothly will be agreed before Christmas. After discussions on Tuesday, Jiří Paroubek said it was possible he and Prime Minister Mirek Topolánek would hold further talks on the matter in the near future. Mr Paroubek has previously said any agreement would only concern some aspects of EU policy – not domestic politics.

Finance Ministry allows Czech firms to bring in internet gambling

Czech betting firms are to be allowed to operate internet gambling for the first time. Following lobbying from the country’s biggest betting companies, the Finance Ministry decided to allow five firms to introduce on-line gambling. Currently Czech firms are losing out as punters in this country bet on websites based in other states. Gamblers who wish to bet on-line will first have to register in person at bricks and mortar betting shops, a Finance Ministry spokesperson said.

Kočí sworn in to fill seat vacated by former turncoat Pohanka

The Social Democrats Irena Kočí has been sworn in as a member of the Chamber of Deputies, following the resignation of his seat in the lower house by her former party colleague Michal Pohanka. Mr Pohanka had previously abandoned the opposition benches to vote with the government; his departure has further weakened the shaky coalition, which is unsure of a majority in the lower house.

Government decides not to set euro adoption date

The Czech government has taken the advice of the Finance Ministry and the governor of the central bank and decided not to set a date for adopting the common European currency, Finance Minister Miroslav Kalousek said on Wednesday. That means the Czech Republic will not sign up next year to ERM-II, the exchange rate mechanism which is a major step towards full euro adoption. Several Czech business leaders have called for the introduction of the euro, as the strong Czech crown has had a negative impact on exports. Neighbouring Slovakia joins the eurozone on January 1.

Weather

Over the next few days we can expect grey skies and temperatures of up to 4 degrees Celsius.