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Government has approved main goals of fiscal reform. A higher than expected retail sales growth in April confirmed a strong domestic demand. Czech industrial producer prices were down 0.8 percent in May. Germany's RWE Gas has acquired remaining 3 percent in Transgas. LNM Holdings has cancelled a plan to buy out minority shareholders at Czech steel maker Nova Hut. Skoda Auto saw revived sales in May and views the rest of the year with mild optimism.

The focus of today's edition of Economics Report is the Czech referendum on European Union accession. On Friday afternoon Czechs will begin going to the polls to decide that fundamental question 'to join, or not to join'. The Czechs' answer, either way, will have a profound effect on the future of the country for generations to come. So far, all indications are that Czechs - like their neighbours in Poland and Slovakia - will vote to join the EU. A Stem survey released this week has predicted that around 78 - 80 percent of those who come to the

Capital market stays calm ahead of Czech EU referendum. GDP grows faster than expected. Czech consumer prices remained unchanged in May. Jobless rate continues to fall. The Czech Republic is to increase its dependence on coal and nuclear power. Dominant fixed-line operator acquires mobile leader. Cesky Telecom plans to expand abroad.

Act now or die, that is the imperative of today for small and medium-size enterprises as the time for preparation for the vast, highly competitive, borderless EU market is running out. A recent survey in ten Central and East European candidate countries showed that although companies are widely optimistic about their future on the single market, the state of their overall preparedness suggests that the level of optimism may be unsubstantiated.

Trade Unions are planning mass protests against planned government reforms. Growth of national average wage outpaces both inflation and labour productivity. State budget deficit widens due to lower-than-expected tax revenues. Central Bank keeps interest rates unchanged, but opens the door to a possible future rate cut. Fixed-line telephone operators call for the interconnection tariffs between fixed and mobile networks to be reduced. New advisor for Unipetrol privatisation selected.

Czech Budvar brewery wins another trademark battle with American giant Anheuser-Busch. European Union candidate countries are trying to cut a bigger slice of EU budget pie. The Czech foreign trade grows more than expected, Q1 result revised to half of original figure due to mistake. Czech Central Bank is satisfied with the recent relative stability and the exchange rate of the crown. The International Monetary Fund has lowered its 2003 GDP growth forecast for the Czech Republic. Parliament approves a law on local loop unbundling to increase competition

The focus of this weeks economics report is the Czech film industry, more specifically the Barrandov studios. Film production has a long and successful history in the Czech Republic. All these films were filmed and produced at the legendary Barrandov Studios in the South-West corner of Prague. Today the studio has become so popular with Hollywood productions that it is often referred to as the Hollywood of the East. I recently visited the studio's and caught up with marketing director Matous Forbelsky. He explains the interesting history of Barrandov

Economic news in brief...

There has been a long tradition of wine production in the Czech Republic. It is believed that wine production in the dates as far back as the year 276, where a conquering Roman legion laid out the plans for a vineyard in the Moravian town of Palavain. Today, almost one and a half million hectoliters of wine are consumed annually by Czechs. Although these numbers are much lower than the traditional drink in the Czech Republic beer, wine is gaining in popularity.

In this week's economics report we take a look at the current labor dispute at the national air carrier Czech Airlines (CSA). As if the war in Iraq and the fear of SARS around the world isn't enough to shrink business for airlines, CSA now has to deal with a labor dispute between management and the pilots' association. The dispute between the two parties took a turn for the worse last Wednesday when pilots' commenced a work slow-down because of a deadlock in negotiations. The major roadblock is the issue of new contracts for CSA pilots', the pilots'