The Ministry of Finance has said it will prepare a further package to curb
the country’s rising budget deficit. But a spokesman said there would be
no attempts to push the second package through parliament before elections
due in May next year. That ambitious step to set a framework for the 2011
budget had previously been backed by Finance Minister Eduard Janota.
The Czech Republic faces the likelihood of disciplinary measures from the European Commission because of its high deficit. There are also mounting worries that the country’s credit rating could be cut by international agencies.
The Finance Ministry’s comments come with tension still high over the final format of next year’s budget following sweeping changes voted through last week. Last week’s changes, backed by left wing parties, largely aimed at increasing wages of public workers. The government has said it will seek to absorb the extra spending so that the 2010 budget deficit stays at around 163 billion crowns or around 5.3 percent of Gross Domestic Product. That task is set to be the main focus of a Cabinet meeting on January 10.
Top Civic Democrat Petr Nečas called Thursday for the government as a whole and not just the prime minister to give a public commitment that it will seek to curb the budget deficit.
Police on Thursday charged a 51-year-old man with robbery. The charge
follows a dramatic four-hour armed hold up at a bank in a Prague suburb on
Wednesday during which a masked man held two women bank staff hostage.
Police said further charges of kidnapping and blackmail were possible. The
man demanded a ransom of three million crowns, or roughly 160,000 dollars.
A special police unit eventually freed the one remaining woman hostage and
seized the man after creating a diversionary explosion. Bank hold ups
combined with hostage taking are relatively rare in the country.
Civic Democrats take control of Prague city council
The right-wing Civic Democrat party took full control of the running of Prague city council on Thursday. The move follows the resignation of the remaining Green Party member on the council, Petr Štěpánek. Civic Democrats, who have a majority on the 70-seat assembly decided last week to end their coalition with the Greens. The only other Green on the council stepped down last week in protest that her proposals for a more vigorous fight against corruption and investigation into the city’s controversial introduction of a new electronic payment card were blocked.
Two top members of the Czech army have resigned their positions with
effect from the end of the year. Czech media have linked the moves to a
series of recent scandals concerning Czech units serving abroad. A Ministry
of Defence spokeswoman said the requests to leave were made by the two
deputy chiefs of general staff and would not comment further.
General Jiří Halaška was responsible for managing units serving on foreign missions. He was suspended from duty in November following a scandal when two Czech soldiers serving in Afghanistan were revealed to be wearing SS symbols on their uniforms. General Josef Prokš said he wanted to leave the army after 15 years service and no further motives should be sought.
As well as problems in Afghanistan, the Czech peacekeeping force in Kosovo has been tarnished by reports of soldiers smoking dope and regularly getting drunk. One soldier also accidentally shot a colleague.
Four out of five Czechs believe that global warming has taken place in the past years according to a survey by the STEM agency. Around 75 percent of those surveyed said this was caused by human behaviour but a quarter put this down to natural changes. Three quarters also believed that the Czech Republic should take bolder steps to curb greenhouse gas emissions even if this has an impact on the Czech economy. Talks between world leaders on a new global framework to curb greenhouse gases culminate in Copenhagen at the end of this week.
The Czech Ministry of Interior said on Thursday that around 2,089 foreigners had taken advantage of its voluntary repatriation programme. This amounts to around a third of the potential uptake. The initial programme offering free flights home and a cash payment of around 13,100 crowns to foreigners working legally was launched in mid-February with 1,871 foreigners taking up the offer. A follow up programme ending December 15 with the payment cut to around 7,880 crowns attracted only 218 people. The Ministry launched a third programme offering just free flights for foreigners illegally staying in the country. This was taken up by 169 people.
President Václav Klaus has vetoed a parliamentary proposal aimed at banning the sale of Prague airport. He said that the move encroached on the government’s powers. The move to ban the sale of the airport on the grounds that it is a strategic asset for the whole of society was originally passed by the lower house at the start of this year. The move was mainly backed by the Social Democrats, Communists and Christian Democrats. The Senate opposed the proposal but was overruled in a second vote by the lower house. Social Democrat shadow finance minister Bohuslav Sobotka said the party would seek to overturn the presidential veto.
Police said Thursday that they had charged a Prostějov-based organ maker with fraud. The man was commissioned by Hradec Králové city council to build a new organ for its philharmonic orchestra and advanced 6.0 million crowns as a down payment. When the project appeared to be running into problems, the council asked for the money back but the man had already spent 5.4 million on himself. He faces up to 12 years in prison if found guilty. The organ was supposed to have been completed in 2007. Last year the contract was awarded to another manufacturer.
In football, Sparta Prague have bowed out of the Europa League following a 0:3 home defeat against Copenhagen on Wednesday night. A weakened Sparta struggled against the more active Danish opposition and were two gaols down by half time. They needed to win the game to go through to the next round of the competition. City rivals Slavia Prague play their last Europa League game on Thursday against French team Lille but have no chance of going further in the competition.
Prime Minister Jan Fischer has said the Czech Republic will likely be investigated in the coming year by the European Commission on account of its high budget deficit. Speaking at an economic forum in Prague on Wednesday, Mr Fischer stated that while the investigation is a standard procedure, any further deepening of the deficit could jeopardise the transfer of money from EU funds, and the recommendations arising from such investigations can bring what he called “painful” measures. EU finance ministers agreed at the beginning of December that the Czech Republic would have to decrease its budget deficit to less than 3% of GDP by 2013 if it is to adopt the Euro in the foreseeable future. Alterations made by left-wing parties to the recently-passed 2010 budget have pushed the deficit for that year past what the current finance ministry considers acceptable.
The Czech National Bank has reduced the country’s base interest rate to the historic low of one percent. Four members of the central bank’s seven-man executive board voted on Wednesday to cut the rate by a quarter point. Vice Governor Miroslav Singer said that the reason for the cut was the persistent decline in market interest rates this year and the bank’s prognosis of gradual growth in 2010. The board last lowered the interest rate at the beginning of August to the then-historic low of 1.25%, at which time all seven members agreed on the cut.
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