Daily news summary News Wednesday, JULY 29th, 1998

29-07-1998

Radio Prague E-News, July 29, 1998, Vladimir Tax

Hello and welcome to Radio Prague. I'm Vladimir Tax and here's the news. First the headlines.

These are the main points and now the news in more detail.

Cabinet first session

In its first session today, the new Czech cabinet is discussing its programme manifesto. Last week, Premier Zeman presented a draft of the manifesto. Its main aims are fighting corruption and economic crime, speeding up economic growth, and making the capital market more transparent.

Kavan about foreign policy: no change towards Moscow

Foreign minister Jan Kavan said on Tuesday he was not preparing any changes in Czech foreign policy towards Russia. The ministry rejected allegations that the new Social Democrat cabinet wanted to strengthen ties with Moscow.

Ministry spokesman Rudolf Hykl said the main goals were full NATO membership, integration into the European Union, and good relations with neighbouring countries, which is in fact continuation of the policy of the former foreign minister Jaroslav Sedivy.

Flood damage in Rychnov district reaches 1.47 billion crowns

The damage caused by last week's floods in the Rychnov district in Eastern Bohemia has reached 1.5 billion crowns, the district office said on Wednesday. The greatest damage was caused to community and private property. According to the head of the district office, Petr Narwa, the figures are not final and the damage is expected to be much larger.

Interest rate changes looming on the horizon

Czech Deputy premier for economic affairs Pavel Mertlik told Reuters on Tuesday that the new cabinet will propose a balanced budget or a budget with a small deficit for next year. He said the government will also propose changes in the tax system, especially an increase in the consumer tax and social insurance. On the other hand, Mertlik sees room for lowering of the corporate tax from the current 35 to around 20 percent.

Minister Mertlik sees it necessary to change the setting of the interest rates in order to stop the Czech economy's stagnation and start economic growth.

He is convinced that high interest rates maintained by the Czech National Bank push inflation down more slowly than it is necessary for the Czech Republic's accession to the European Union. In his opinion, a monetary policy of lowering the inflation rate must be based on sustainable economic growth rather than on unrealistic inflation targets set by the Central Bank.

Police think they know

The Czech economic counterintelligence service claims that it discovered a bank account in Switzerland which the Civic Democratic Party used to secretly finance its activities. Wednesday's daily MLADA FRONTA DNES quoted unnamed interior ministry officials who confirmed this information. The Civic Democrats have always denied they had such an account abroad.

The Civic Democratic Party's financial scandals led to a collapse of a cetre-right coalition government led by Vaclav Klaus last autumn.

Zemanian slip

The German government party, the CSU has criticized Czech premier Milos Zeman for his statements on the Czech-German Discussion Forum. The German press agency DPA quoted a CSU representative as saying that Zeman made an unexcusable slip. DPA recalled Zeman repeatedly comparing Sudeten Germans with Czech political extremists.

The Czech-German Discussion forum was launched at the beginning of July and the Czech Social Democrats did not delegate their representative into its coordination council as a protests to the fact that one of the Sudeten German representatives is Franz Neubauer who has always opposed the Czech-German reconciliation treaty.

Better access to shares for foreign investors

An amendment to the banking law will provide foreign investors better access to shares of Czech banks. The law, which comes in force in September, will allow foreign investors to acquire up to ten percent stakes in Czech banks without the Czech National Bank's consent.

However, experts are sceptical as to long-term interest from foreign subjects because of uncertainty about the new government's stance towards bank privatisation.

Czech weather report

And finally, a brief look at the weather. We are expecting a partially cloudy day with scattered showers, afternoon highs should range from 20 to 24 degrees Celsius. Thursday and Friday should also be rather cloudy with showers, with temperatures around 25 degrees Celsius.

And that's the end of the news.

29-07-1998