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Breakfast Brief – 30 June 2009

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Table of Contents

NEWS
Flood danger might continue until Friday
Meteorologists yesterday issued an extreme flood warning for eight regions. Storms and torrential rains might continue until Friday. Finance Minister Eduard Janota said yesterday that damages will exceed CZK 5 billion, further stretching public finances. The government began disbursing CZK 99 million earmarked for affected regions and allocated additional money for bridge repairs.
most Czech press

KDU-ČSL, ČSSD want tax hike for high earners
The Christian Democrats plan to introduce legislation setting a tax rate of approximately 30% for those earning more than CZK 1.2 million a year, while the Social Democrats are calling for a 38% top rate. The current rate is 23% of gross income for all earners. Pavel Horák, KDU-ČSL deputy chairman, said a two-tiered tax system is more socially just.
HN 1, 2, 3

HN: Sobotka used transport bonus to pay for flat
ČSSD first deputy chair and former Finance Minister Bohuslav Sobotka released a statement yesterday detailing his finances in response to press reports about his recent purchase of a CZK 7 million Prague flat. Sobotka, who said he was able to pay for the apartment by saving CZK 5 million during his 12 years in politics, reported earning between CZK 71,000 and CZK 110,000 a month from 2003 to this year, figures that included his government clothing and transport bonuses. Hospodářské noviny reports that despite living in Prague for some years, Sobotka maintains permanent residency in Slavkov u Brna and receives a monthly CZK 35,000 transport bonus.
HN 1, 4

LN: Neumannová fudged ski event finances
Lidové noviny reports on allegations that Kateřina Neumannová, head of the organisation committee for February’s FIS Nordic World Ski Championship in Liberec, split large contracts into multiple smaller invoices to circumvent required signatures from the other officials. According to LN, some supplier companies for the event also supplied a Prague Ski competition organised by Neumannová’s close friend, Josef Jindra. Some sources claim money earmarked for the championships went to Prague Ski.
LN 1, 4

Airport chaos after border security blunder
Flights at Prague Airport were delayed by hours after passengers from Russia were accidentally admitted to terminal 2, which is reserved for travel within the Schengen free movement zone. Police had to seal the whole transit zone and check all passports.
LN 6

Cabinet cuts science and research spending
The cabinet yesterday agreed to freeze state science and research expenses for the next three years at CZK 24.84 billion and introduce a new system for distributing such funds. The Academy of Sciences will lose half of its current CZK 5.88 billion budget. The academy called a special meeting today to discuss the changes.
E15 3, MfD B4

Czech officials review EU presidency
Interim Prime Minister Jan Fischer yesterday said the Czech presidency of the EU had successfully resolved a conflict in Gaza and a Russian gas crisis and fought off some member states’ calls for economic protectionism. Deputy PM for EU Affairs Marek Mora said little had been done for the EU integration of Croatia and the rest of western Balkans.
ČTK

Kalousek: 600 on board for new party
The Interior Ministry on Friday registered TOP 09, the political party recently formed by ex-Finance Minister Miroslav Kalousek upon his departure from the Christian Democrats. Kalousek says 600 people have already applied for membership. The new party will field its candidate list for the October elections in late July.
ČTK

Zubová to head splinter Greens group
MP Olga Zubová has been elected leader of the Democratic Green Party, established recently as a result of a split within the Greens.
ČTK

BUSINESS
Farmers block roads over cheap milk
The Agrarian Chamber says up to 5,000 farm workers used 1,900 tractors and other vehicles yesterday to disrupt travel on roads and motorways across the country. Farmers are protesting low wholesale milk prices, which they say are forcing them to cull their cattle herds.
most Czech press

Ministry launches talks on expanding rail market
Transportation Minister Gustáv Slamečka met last week with representatives of passenger transport companies RegioJet, Veolia Transport and Arriva to discuss the prospect of private firms entering the Czech passenger rail market. Jiří Schmidt, head of Student Agency rail subsidiary RegioJet, said the company handed the ministry a concrete proposal two weeks ago. Czech Railways was not represented at the meeting. The talks are expected to continue in the second half of July.
HN 15

RWE Transgas fined CZK 10m
The antimonopoly office has imposed a CZK 10 million fine on RWE Transgas, saying the German-owned natural gas supplier has abused its dominant position on the Czech market to charge almost 80,000 customers excessive advance fees.
most Czech press

Barrandov sees profits slump
Prague-based Barrandov Studios netted CZK 22 million last year, down from CZK 58 million in 2007, with revenues declining CZK 40 million to CZK 600 million. The company blamed the drop on strikes in the US film industry, which often uses Barrandov. The facility is one of the largest filming complexes in Europe and is owned by tycoon Tomáš Chrenek’s Moravia Steel.
E15 6, ČTK

ČD Cargo CZK 100m in red
Leading rail transport company ČD Cargo, which parted from Czech Railways in 2007, has lost CZK 100 million so far this year, Transport Minister Gustáv Slamečka said. The company netted CZK 600 million in 2008. Jiří Mužík of the Czech rail companies association said that while ČD Cargo still remains the biggest rail transporter, private firms have a better position in international transport and are more flexible in responding to market changes.
HN 18

Floods cause disruption, damage on rail
Five rail lines in north Moravia and one in south Bohemia remained closed yesterday following devastating floods in recent days. The Transport Ministry says damage to the rail network has totalled at least CZK 620 million.
ČTK

Wizz Air boosts foothold in Prague
Hungary’s Wizz Air yesterday officially made Prague its 11th base. The budget airline has been expanding into routes already served by Slovakia’s SkyEurope, which is currently in administration, in an apparent bid to take over some of SkyEurope’s market share.
ČTK

Czech firms cutting IT budgets
More than 55% Czech companies will decrease or halt investment in information technology this year, according to a survey by IT researcher and advisor Gartner. The banking and insurance sectors are seeing the biggest reductions, of up to 25%. According to Hewlett-Packard, companies are increasingly looking only at the purchase price of new technology, not the long-term return on investment.
HN 19

Agrofert subsidiary to acquire GreenChem
Duslo, a Slovak arm of top Czech agriculture and chemical concern Agrofert, is planning to acquire a major stake in Netherlands-based GreenChem. The Dutch firm is the biggest supplier of AdBlue, a substance used in lorries to mitigate environmental impact. GreenChem reported the acquisition on its website.
HN 15

Invia expands on Czech, Slovak holiday markets
Invia.cz, the largest Czech and Slovak online travel agent, has boosted its market share by taking over competitor NetTravel.cz and its Slovak subsidiary LastMinute.sk.
HN 18

Jablonex axes glassworks in Železný Brod
North-Bohemian glass jewellery maker Jablonex Group will phase out its glass factory in Železný Brod; 167 staff have been laid off.
E15 6, MfD B4

Irish hotel chain opens new venue in Prague
The Irish hotel chain Jurys Inns will open a new four-star hotel at Prague-Florenc in September, the chain’s first hotel outside of Ireland and the United Kingdom. The CZK 670 million hotel will offer 214 rooms.
ČTK

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