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The new Czech vehicle registration system again collapsed on Monday when it failed to connect with the country’s database of stolen cars and the European registry of identification numbers. The Transport Ministry, which runs the new system, has blamed the collapse on the police which however rejected any responsibility for the problems. The new registration system has been malfunctioning ever since its launch two weeks ago; the Transport Ministry said it would demand compensation for the problems from the system’s supplier.

The European Commission will resume payments into seven Czech operational programmes, Czech Prime Minister Petr Nečas said on Monday referring to a telephone conversation with European Commissioner for Regional Policy Johannes Hahn. Payments into 14 out of 17 Czech programmes were put on hold earlier this year over control and auditing issues. After a review of a Czech strategy to remove these problems, the European Commission will renew payments in the coming days, Mr Nečas said. The Czech Ministry for Regional Development said around 900 million euro could be released as part of these programmes until the end of 2012; however, it’s not clear if and when funding of the remaining programmes could resume as well.

In this week's Business News: the government reduces its forecasts for deficit reduction; the Finance Ministry predicts slower growth; Moody's affirms the Czech Republic's stable rating; Koh-i-noor is to purchase a French gas company; the country's water management authority commissions a study into a massive canal project and the country's construction sector is hit by the weak economy.

On the first day of his state visit to Malaysia, Czech President Václav Klaus on Thursday instigated a row with the EU ambassador to that country, the news website novinky.cz reported. At a lecture hosted by a local institute, Mr Klaus told the ambassador, Alessandro Paolicchi, that he did not represent him, and that he did not approve of the EU having an ambassador to Malaysia. The Czech president later told reporters he expressed his opinion in a “friendly” way. Ambassador Paolicchi said the Czech president should realize his country was a member of the EU. President Klaus is on a six-day trip to the region which includes official visits to Malaysia and Indonesia.

An initiative by several Czech NGOs and members of the country’s business community seeks to stir up debate about the Czech Republic’s position within the European Union. The manifesto, entitled Confident Czech Republic in a strong Europe, calls on MPs and government officials to ensure that Czechs remain at the core of the EU. In this edition of Marketplace, we talk to some of its authors and signatories and looks at what impact, if any, the initiative might have on the Czech debate about the future of the European Union.

The opposition Social Democrats have called for the dismissal of Finance Minister Miroslav Kalousek whom they accuse of botching the government’s fiscal reform, being responsible for the problems with EU funding and most recently trying to influence the investigation into the overpriced purchase of Spanish military CASA planes. Party leader Bohuslav Sobotka said on Monday that the finance minister had become a serious liability and urged the prime minister to act with the same speed with which he had earlier dismissed the justice minister for alleged poor financial management. The opposition argues that the finance minister’s painful fiscal cure in the form of VAT hikes is clearly not working since the state deficit in the first half of this year is at the same level as last year and the country is clearly not going to meet its fiscal targets.

At a two-day summit in Brussels which ends on Friday, EU leaders agreed to set up a joint banking supervisory body to oversee banks in eurozone member states. They also approved a plan to boost growth in the bloc and agreed on a roadmap towards fiscal union in the euro zone. Czech officials, who initially expressed concern over proposals that the new banking authority should also supervise banks in countries outside the monetary union, seem content with the summit’s outcome.

Regional Development Ministry says system of drawing EU funds is fixed; external debt grew by 33.7 billion in first quarter; household indebtedness grew by 3.6 billion from April to May; Nečas says impacts of EU summit measures will be limited; Czech National Bank cuts interest rates by quarter percent.

Prime Minister Petr Nečas has said he does not expect the EU summit in Brussels to produce concrete results. Speaking ahead of the meeting, the Czech prime minister reiterated his stand against a banking union and closer integration, saying that in any case his mandate would not allow him to sign up to far-reaching changes. The Czech head of government noted that further efforts at weakening the position of national institutions in favour of Brussels would be seen by the Czech side as very problematic. He said moreover that certain proposals which had appeared in the media could lead to a violation of the single market rules in the area of financial services which he considered a big setback.

TOP 09 chairman Karel Schwarzenberg expects a major coalition dispute over differing views on the depth of European integration. Foreign Minister Schwarzenberg wants the Czech Republic to remain within the core European mainstream, which he says is the only realistic possibility that would be beneficial to the Czech Republic. The prime minister, he said, was of a different opinion, one that reflects a certain wing of the Civic Democratic Party. Nonetheless, he says, the government can no longer zigzag on the Czech approach to the issue and must develop a unified stance, which he believes may result in a very difficult situation.