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The Industry and Trade Ministry is preparing a special help programme for businesses affected by the recent floods, particularly small and mid-sized businesses.

Czech retail sales dropped by 0.5 percent year-on-year in June in real terms, while in May they increased by 3.2 per cent, the Czech Statistical Office reported.

The Czech government said it wanted to obtain money for financing repairs of flood damage by increasing indirect taxes, including the VAT and consumer tax on petrol, tobacco and alcohol.

Poland has introduced administrative protection of its steel market against imports. Poland has set a total quota of 670,000 tons on steel imports from WTO countries, and an additional import surcharge of 25 percent on imports exceeding that quota.

The recent devastating floods have had a serious impact on all of the Czech economy. One of the industries to be affected as a whole is the incoming tourist industry. Normally, this is one of the most productive branches bringing a substantial revenue to the state coffers with little costs. Now, after the floods, people in the travel business expect a serious dropout in sales.

Premier Vladimir Spidla said he would ask the Chamber of Deputies to postpone the deadline for submitting a draft state budget for 2003 until the end of October.

The Finance Ministry and the Czech Association of Insurance Companies estimates that Czech insurers will have to pay around 19 billion CZK in compensation.