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The Czech Republic has failed to take the necessary steps to cut its deficit in public finances down to EU limits, the European Commission said on Wednesday, urging Prague to increase its efforts. The European Union launched legal action against the Czech Republic in 2004, giving the country until 2008 to bring its deficit into line with an EU limit of three percent of GDP. Although the deficit was brought down to 2.9 percent last year, it is expected to balloon again this year due to higher spending. The government's current budget plans foresee reducing the deficit to 3.2 percent in 2009 even though the country is enjoying stronger-than-expected economic growth and equally robust tax revenues.

A crowd of around 5,000 residents in the Czech Republic's second-largest city of Brno gathered on Friday to get a chance to see the presidents of 15 central and eastern European states ahead of a two-day conference now underway. Some areas were blocked off to create a corridor for the arrival of the heads of state. The presidents are meeting in Brno as part of an annual conference this year hosted by Czech President Vaclav Klaus. Among topics on the agenda are relations with Russia and dialogue with the European Union, as well as the future of Kosovo and the safety of the Czech nuclear power plant Temelin.

In Business News: the government approves a package of tax and public spending reforms; the EC is to warn the Czech Republic that it is failing to keep its public deficit under the limit of three percent of GDP; the OECD forecasts a slightly slower economic growth for the Czech Republic; Czech companies have won a 120-million-dollar contract in Iraq.

The presidents of 16 central and eastern European states are gathering in the Czech Republic's second city Brno, ahead of an annual conference which is being hosted this year by Czech President Vaclav Klaus. Among the subjects on the agenda at this year's meeting are dialogue with the European Union, relations with Russia and security questions. President Klaus has said disputes in the regions of Kosovo and Transnistria will also be discussed by him and his counterparts.

Ahead of the conference, the authorities in Brno hired specialised teams to remove graffiti on the route between the airport and the centre of the city. Pavements in the historic centre of the Moravian capital were also repaired on the eve of the presidents' visit.

Sixteen Central European presidents will meet from Thursday in the city of Brno to discuss dialogue with the European Union, problems with Russia and security issues. President, Vaclav Klaus, who will be hosting the conference, has said that problems in the regions of Transnistria and Kosovo will be on the agenda of the talks. The deployment of the US anti-missile shield in Poland and the Czech Republic could also be raised. The presidents of Albania, Austria, Bulgaria, Bosnia-Herzegovina, Croatia, Hungary, Italy, Macedonia, Moldova, Montenegro, Poland, the Czech Republic, Romania, Serbia, Slovakia and Ukraine are due to be present in Brno. The 14th annual summit of Central European presidents has developed from the first event staged in Salzburg, Austria, in 1993, at which only the Czech Republic, Hungary, Germany and Austria were represented.

Spain's Foreign Minister Miguel Angel Moratinos, whose country has already ratified the EU draft constitution, agrees with his Czech counterpart Karel Schwarzenberg that a new European agreement supported by all EU member states needs to be drawn up. On an official visit to Prague, Mr Moratinos said dialogue and debate played a crucial role in finding a joint position on the EU's future role. The two state representatives also discussed Washington's plans to station part of its missile defence system in Poland and the Czech Republic and their countries' positions on Cuba.

With regards to the US missile shield, Mr Schwarzenberg said it was no surprise that US lawmakers moved to cut the budget for the extension of the shield to Central Europe. Regarding Cuba, both men agreed that their countries' goals are the same but methods of achieving them differ. Spain prefers to take up the issue of human rights violations through dialogue with the Cuban government, while the Czech Republic has been pushing for Brussels to exert more political pressure on the island's totalitarian regime.

The Czech Republic's Horicke trubicky, or Horice rolled wafers, have been added to the EU's list of protected food products. Six other Czech products are already on the list. They include the Pohorelice carp, Budvar beer, Czech hops and the "Stramberk ears" cone-shaped gingerbread cookies. Horicke trubicky are crunchy and made from wheat pastry flour, powdered milk, vegetable oil, powdered egg yolks, sugar and water. Their producers now hope that the wafers will also be granted EU protection of geographical indications and designations of origin.

Two Roma women, attending a Council of Europe meeting in Strasbourg on Monday, described in emotional detail how they had been sterilised against their will in Czech hospitals, AFP news agency reports. Helena Baloghova and Elena Gorolova gave moving testimony as they presented a photographic exhibition created by an association of women victims of forced sterilisation. The group, based in the Moravian town of Ostrava, is calling for compensation and a public apology for illegal sterilisations of Roma patients. A Czech expert at the Strasbourg meeting said the problem of the sterilised women remained unresolved since the Czech government had yet to review ombudsman Otakar Motejl's conclusions on the subject.

In November 2005, a Czech court ordered a hospital to apologise to 22-year-old Roma woman Helena Ferencikova for sterilizing her without her consent, but it ruled she did not qualify for compensation.

The chairmen of the lower house and the Senate, Miloslav Vlcek and Premysl Sobotka, will meet their EU counterparts next week to discuss the future of the European constitutional treaty and reforms of the block. The conference of parliament speakers from EU member states will be held on May 26th and 27th in the Slovak capital Bratislava. The participants are also expected to discuss the roles and positions of national parliaments in EU countries and the issue of national versus European identity.

Police in Moravia's capital Brno are preparing for what is expected to be one of their biggest security operations when seventeen presidents of Central and Eastern Europe meet in the city later this month. The presidential summit is scheduled for May 24-26 and will be guarded by special units as well as some 800 police officers. The deputy head of the south Moravian police, Martin Kotlan, says it is the biggest security operation since Queen Elizabeth visited Brno in 1996.