The Organization for Economic Cooperation and Development has called on the Czech Republic to speed up pension and health care reforms. In a report on the state of the economy published on Tuesday, the OECD warned that the objective of achieving a deficit equal to three percent of GDP by 2008, which is a condition for adopting the euro, would not be reached without further measures. The Czech Republic would like to join the euro-zone sometime at the end of the decade.
The governing coalition has agreed on a plan to reduce public spending by seventy billion crowns in the years 2006 and 2007. The planned reduction in public spending is in line with the EU convergence programme and failure to adhere to it could result in steep fines and problems with accessing EU solidarity finds. The money should be saved predominantly on social benefits and in the state sector.
Finance minister Bohuslav Sobotka has called for an emergency session of Parliament which would freeze the salaries of deputies, senators and ministers in the coming year. The Lower House recently approved a law which postpones a planned increase in the salaries of policemen, firemen and other emergency services but which at the same time raises the salaries of deputies, senators, cabinet ministers and state attorneys as of January 1st of 2005. Coming at a time of cuts in public spending, the news evoked plenty of criticism. Minister Sobotka said that with goodwill from both houses of Parliament there was still time to reverse this decision.
Finance Minister Sobotka has called for a decision on the privatization of telecommunications operator Cesky Telecom to be made this Wednesday. In an interview for the CTK news agency, minister Sobotka said a decision should be made without further loss of time on whether the states' 51 percent stake in Cesky Telecom would be sold directly to a sole investor or through the capital market. If it were through the capital market, the privatization of Telecom could begin before the end of the year. The Cabinet is split on how best to proceed. Several ministers, including Sobotka, favour a flotation on the capital markets since it would bring immediate funds to the cash-strapped government. Several previous attempts to sell the government's stake in Telecom failed.
A group of children from Beslan, whose school in the Russian republic of North Ossetia was held hostage by terrorists in September, is due to arrive in the Czech Republic on Wednesday to undergo medical treatment and rehabilitation. More than 300 people, including many children, died during the siege. About 70 Beslan children, accompanied by their parents and teachers, as well as psychologists, will come for a recuperative stay in the Czech spa town of Karlovy Vary.
Wednesday is expected to be partly cloudy with day temperatures between 4 and 8 degrees Celsius.
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