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Breakfast Brief – 14 September 2009

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Table of Contents

Lawmakers clear path for elections in November
Both houses of parliament on Friday approved snap amendments to the constitution and the election law that will allow the Chamber of Deputies to dissolve itself and call early elections for the first weekend in November. President Václav Klaus signed the bills on Saturday and MPs are slated to vote on the dissolution tomorrow.
Source: most Czech press

Melčák, Raninec threaten new court complaint
Following Friday’s parliamentary approval of constitutional amendments to allow early elections in November, unaffiliated MPs Miloš Melčák and Juraj Raninec said they will likely file a complaint with the Constitutional Court if the amendments are invoked during the current lower house term. Melčák’s suit over the prior attempt to dissolve the house led the court to cancel the scheduled 9-10 October balloting. ODS Chairman Mirek Topolánek said Melčák and Raninec’s argument lacks legal merit and is irrelevant to the current electoral situation.
Source: most Czech press

Election rules could complicate budgeting
Mladá fronta Dnes reports that holding early elections in the fall could set a precedent that complicates the state budget process in years to come. The quadrennial national vote would be moved from June to November, less than two months before the start of the budget year. Finance Minister Eduard Janota said that in the heat of the campaign political parties could turn their backs on the budget. ODS Deputy Chairman Petr Nečas suggests moving the start of the budget year from 1 January to the first day of March or April. Both ODS and ČSSD said that if they win the election they will accelerate approval of the budget by making it the top item on the agenda for the new cabinet and lower house.
Source: most Czech press

MPs vote to leave medical fees unchanged
The lower house on Friday voted to retain medical fees as they are, rejecting a proposal by legislators on the left to waive or reduce the payments. MPs also voted down a Senate proposal to keep the fees but offer patients free inoculation against pneumococcus.
Source: Právo 1 Sat, LN 6 Sat, ČTK

Birth rate, immigration down in H1
The Czech birth rate dropped in the first half of 2009 after a seven years of moderate growth fuelled by parents from large age cohorts born in the 1970s, the Czech Statistical Office reports. The number of immigrants settling in the country declined to 17,500 from 42,600 in January-June 2008. The country’s population grew by 21,641 to 10,489,200.
Source: most Czech press

Klaus backs Slovakia, cites Hungary’s ‘ambitions’
During Friday’s Visegrad 4 meeting in Poland, President Václav Klaus took Slovakia’s side in its conflict with Hungary, saying he has noted “certain long-term ambitions of Hungary to expand”. He also backed Slovakia’s controversial language law, which introduces high fines for failing to use Slovak in official communication with national institutions. Klaus later denied he meant Hungary had territorial ambitions but said he was addressing the country’s aim to “expand [its] influence across the border to the Hungarian minorities abroad”.
Source: most Czech press

Survey: Public not buying pols’ promises
According to a poll conducted by the Median agency for Mladá fronta Dnes, 51.3% of Czechs do not believe the promises they are hearing from politicians, and 46.9% take them with a pinch of salt. Only 1.8% of respondents said they believed the parties’ pre-election promises.
Source: MfD A1, B2

Four charged in Topolánek stone attack
Břeclav police on Friday charged four men with throwing a stone at ODS leader Mirek Topolánek during a campaign appearance last month, hitting him in the head. Klára Slámová, the suspects’ attorney, said they were charged with disorderly conduct. They face up to two years behind bars.
Source: Právo 1, 4 Sat, MfD A2

Squatters kicked out of Prague house
Police yesterday dragged 24 squatters out of a house in Prague’s Albertov neighbourhood. Some of them were former residents of the Milada squat emptied by police in June.
Source: most Czech press

Fingers pointed in ČSA shake-up
Czech Airlines (ČSA) supervisory board members Ivan Kočárník and Ivana Řápková resigned their seats on Friday. Finance Minister Eduard Janota is expected to replace the entire board today. Kočárník, the panel’s chairman, said the government was blocking a restructuring plan that included redundancies, salary cuts and divestments. Řápková accused the Social Democrats of plotting with trade unions against management. Both blamed the airline’s financial difficulties on the team of former CEO Jaroslav Tvrdík.
Source: most Czech press

ČNB expects 1% economic growth next year
Czech National Bank board member Vladimír Tomšík told Hospodářské noviny the bank expects GDP to grow by 1% in 2010 and unemployment to drop slightly after the first six months of the year. The Finance Ministry estimates 0.3% GDP growth next year; trade unions predict a 2% drop.
Source: HN 1, 18, 19

HN: Electricity price cut likely
Hospodářské noviny reports that consumers will pay 7% less on average for electricity starting in January, and companies that negotiate their own power prices could see a 15% decline. Electricity suppliers declined to disclose their new prices, but ČEZ and E.ON said the 7% and 15% cuts are likely. Distributor fees, which make up half of the final electricity price, will grow, according to the Energy Regulatory Office.
Source: HN 1, 17

Industrial output down sharply in July
Czech manufacturing output in July was 18.2% lower than a year earlier, following June’s 11.8% decline, the Czech Statistical Office said Friday. The construction sector was down 4.4% after a 0.7% increase in June.
Source: ČTK, Právo 7 Sat, LN 14 Sat

Škoda planning new model
Škoda Auto is preparing a new model designed to replace the older version of the Octavia Tour, which is currently being sold alongside the new edition. The older Octavia, available since 1995, is the most successful model in the company’s history. CEO Reinhard Jung said the new car will be smaller and less expensive, with a less powerful and an all new design.
Source: MfD A1, A9 Sat

Bourse down Friday on Telefónica O2 plunge
Shares of mobile phone operator Telefónica O2 fell by 11.9% on Friday, closing at CZK 435. The drop dragged the PX index down by 0.58% to 1,141.4 points. Unipetrol shares grew by 8.5% to CZK 142.
Source: Právo 18 Sat, E15 13

Avia promotes electric lorry in ČR
Czech lorry manufacturer Avia on Saturday presented the Smith electric lorry in the Czech Republic. The environmentally friendly vehicle could start selling in the country next year. The Smith, which feature chassis and cabins made by Avia, is already used in Great Britain, Ireland and the US.
Source: ČTK

NY Times spotlights CZK 23m Czech home
The New York Times’ Great Homes and Destinations series, which focuses on attractive sale properties worldwide, earlier this month featured a luxuriously furnished farmhouse in Mirošovice near Prague. The house is on the market for CZK 23 million. The article also details current developments in the Czech real estate market..
Source: HN 1, 5

Nova head Dvořák named to regional CME post
Media firm CME has named Petr Dvořák, CEO of its Czech subsidiary Nova, vice president of a new division overseeing the company’s 19 television stations across central and eastern Europe. Dvořák will be charged with reversing the unfavourable financial standing of most CME properties. Nova is the only CME arm currently in the black.
Source: E15 8, 9

Setuza sells out more assets
Setuza shareholders on Friday approved the sale of assets worth CZK 741 million, taking total divestment over the past years to more than CZK 3 billion. The discontinued producer of cooking oils, detergents, cosmetics and bio-diesel has been selling production facilities and trademarks to settle unpaid debts.
Source: ČTK

Machinery firms report major contraction
Since late 2008 Czech machinery manufacturers have reduced costs and staff numbers and have seen production and orders decline by tens of percent, according to a ČTK survey of firms in the sector. Respondents said they expect a major recovery starting next spring..
Source: ČTK

ČZ’s profits halve in 2008
Net profits at ČZ, a supplier of components for the automotive industry, dropped to CZK 12.5 million last year from 2007’s CZK 24.7m. Revenue declined 8.8% to CZK 1.62 billion. The company blamed the recession and the strong crown.
Source: ČTK

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