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Breakfast Brief – 10 April 2009

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Table of Contents

NEWS
Lower house panel backs scrapping medical fees
The Chamber of Deputies’ healthcare committee yesterday recommended that MPs vote to abolish all medical fees. Central Bohemia’s unilateral suspension of the CZK 30 prescription fees in the region’s public pharmacies was dealt another blow Monday when Prague City Court banned the programme, saying it violated competition rules.
most Czech press

Fischer named caretaker premier
President Václav Klaus yesterday appointed Czech Statistical Office head Jan Fischer the new prime minister, ratifying an agreement between most of the outgoing coalition government and the opposition ČSSD. Fischer has a month to form a caretaker government that will run the country until early elections in October.
most Czech press

Mora, Kohout, Pecina in line for new cabinet
Economics and EU expert Marek Mora is considering the job of deputy prime minister for European affairs in Jan Fischer’s interim government. Mora is currently a deputy to Alexander Vondra, who now holds the post. Deputy Foreign Minister Jan Kohout and antimonopoly office head Martin Pecina are considered possible choices for foreign and interior minister, respectively.
most Czech press

ODS ousts renegade Tlustý
Rakovník group of the Civic Democrats (ODS) yesterday voted to expel MP Vlastimil Tlustý from the party over his vote of no confidence last month in the ODS-led cabinet.
HN 2

Survey: Patients want friendlier hospitals
Hospital patients do not think doctors spend enough time talking to them about their conditions, according to a Health Ministry survey. Respondents also criticised early morning wake-up calls, poor sanitation and a lack of privacy.
Právo 5, LN 4

Nečas: Reform has saved state up to CZK 80bn
Last year’s public finance reform has so far saved the state up to CZK 80 billion, Labour and Social Affairs Minister Petr Nečas said yesterday.
LN 15

Czech and Slovak battlegroup is almost ready
The Czech and Slovak republics are at work building a joint battlegroup of some 2,000 soldiers which would be at the EU’s disposal come summer. The unit could be deployed up to 6,000 kilometres away on 10 days’ notice. Two EU battlegroups are formed every six months; the other teams Belgium and France.
HN 5

Works to start on new Holešovice-Trója span
Construction of a new bridge linking Prague districts Holešovice and Trója is due to start next month. The arched span will replace the existing tram bridge built in 1977, which was supposed to be temporary, and will serve motor vehicles, trams, cyclists and pedestrians. The project is slated for completion in 2011.
LN 6

BUSINESS
HN: Banks readying for mass defaults
Czech banks are preparing crisis scenarios to be ready for if the number of clients unable to make loan payments spikes, Hospodářské noviny reports. Bankers say there will be up to 100,000 such clients if the jobless rate rises to 10% by the end of this year. Outstanding loans currently total CZK 888 billion from banks and 155 billion from other financial institutions.
HN 1, 19

ČSA mulls staff cuts, BA won’t bid
Czech Airlines (ČSA) has informed local authorities it may make large-scale redundancies, but the firm says it has made no concrete decisions on job cuts. British Airways CEO Willie Walsh has said BA has not joined a current tender to buy ČSA because the Czech firm did not fit its strategy. BA will add more flights between London and Prague.
HN 22, LN 16, ČTK

Inflation up slightly in March
March consumer prices rose 2.3% year-on-year, slightly up from February’s 2% increase, the Czech Statistical Office said yesterday. The Czech National Bank predicts inflation will decline by year-end and real wages will grow by 1%.
most Czech press

ČR to lend CZK 27bn to IMF
Finance Minister Miroslav Kalousek confirmed that the Czech Republic will lend CZK 27 billion to the International Monetary Fund to aid countries affected by the financial crisis under last week’s agreement at the G20 summit in London. The money will come from the Czech National Bank’s foreign exchange reserves. ČNB Vice-Governor Miroslav Singer said details of the loan remain to be worked out, and Finance Minister Miroslav Kalousek said the amount could be some EUR 200 million less.
E15 1, 4

Goldman Sachs: Crown to reach 25.50/EUR within year
US investment bank Goldman Sachs predicts the Czech crown will be trading at 25.50 to the euro within a year and will be the best-performing of all central European currencies. The firm expects the crown, currently trading at about 26.60/EUR, to weaken to 27.50/EUR in the next three months before recovering.
HN 25

ČEZ moves up in Forbes list, buys biomass firm
Power giant ČEZ ranked 336th in Forbes magazine’s annual Global 2000 survey of the world’s largest companies, up 125 notches from last year. ČEZ also inked an agreement to buy 100% of Czech Heat, owner of a biomass-fuelled power and heating plant in Jindřichův Hradec, for an undisclosed price.
HN 17, 23, LN 15, ČTK

Škoda Auto wins Czech Top 100
Škoda Auto came out on top in the 11th annual Czech Top 100 association ranking of the most admired Czech firms. Defending champion ČEZ was second. Škoda also celebrated the production of the 7 millionth car at its Mladá Boleslav plant since it merged with Volkswagen in 1991.
ČTK

Central Group wants Orco’s Bubny
Development firm Central Group has confirmed its interest in buying part of the Prague-Bubny site acquired by Orco Property Group for CZK 1.1 billion. Orco, which lost CZK 10.4 billion last year, is looking for buyers for its projects. Central Group’s Dušan Kunovský said Orco overpaid for the property and his firm would be more economical.
HN 20

Ekospol chief: Flat prices won’t drop much
Although demand for new flats has dropped by up to 50% since last year, prices will still reflect construction costs and drop by 5% at most, according to Evžen Korec, CEO of development firm Ekospol.
ČTK

Landlords oppose rent deregulation delay
The OSMD association of landlords warned that a proposed postponement of full rent deregulation would cost municipal coffers CZK 5 billion-6 billion and said they would sue the state to recover their own resulting losses, estimated at CZK 4 billion-5 billion.
ČTK

Court slaps Vodafone for defacing competitors’ ads
Prague City Court ordered Vodafone to apologise in major Czech dailies to T-Mobile and Telefónica O2 for planting fake moose antlers, known from Vodafone’s ads, on competitors’ billboards in a 2006 guerilla campaign. The apology advertisements will cost Vodafone several hundred thousand crowns
HN 18

Analysts: Tax, social insurance changes best crisis measures
Analysts polled by ČTK most welcomed cuts in social contributions, faster depreciation and higher tax exemptions for families among anti-crisis steps agreed by the outgoing coalition government and the opposition Social Democrats. Most say the proposed car-scrapping bonus is not a systemic solution and will affect public finances.
ČTK

Lotteries defy crunch
Czech betting agencies have taken in some 15% more so far this year than during the same period in 2008, thanks mainly to the legalisation of online gambling.
ČTK

Furniture sector wants scrap bonus
Following a ČSSD proposal to introduce a CZK 30,000 bonus for buyers of new cars who turn in their old vehicles, the Association of Czech Furniture Manufacturers is calling for a CZK 15,000 incentive for those who scrap their old furniture and buy new.
ČTK

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