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Breakfast Brief – 17 September 2009

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Table of Contents

Caretaker govt demands go-ahead for Janota’s budget
Prime Minister Jan Fischer has said the caretaker cabinet is ready to run the country until next spring, but the form of its mandate must now be made clear and a new confidence vote held if necessary. He emphasised the cabinet would only continue if the parties agree on Finance Minister Eduard Janota’s budget cuts.
Source: ČTK

Cabinet says no to higher pensions
Cabinet yesterday rejected Social Affairs Minister Petr Šimerka’s plan to raise pensions, agreeing only a pension bonus for those who took part in the Nazi resistance. Šimerka’s proposal would have increased monthly pensions by CZK 200, costing the state an extra CZK 7.1 billion.
Source: Právo 16

No polls until constitutional risk averted, say Paroubek, Klaus
After meeting with Social Democrat (ČSSD) leader Jiří Paroubek yesterday, President Václav Klaus agreed elections should only take place when there is no threat of their retrospective invalidation. Klaus said the caretaker cabinet requires a strong and clear mandate. He added he has not given up on holding elections before next spring and that he will continue to search for solutions to the current political impasse.
Source: most Czech press

Poll: ODS and ČSSD would tie in elections
ODS and ČSSD would each win 29.5% of votes if balloting took place now, according to an early September poll by CVVM. The Communists would come next in the polls, with a 15.5% share followed by TOP 09 with 13%. KDU-ČSL would also claim a place in the lower house, capturing 5.5% of votes.
Source: Právo 2

PM: Cabinet will try again to ban extremists
Prime Minister Jan Fischer said yesterday his cabinet would file another bid to ban the far-right Workers’ Party (DS), warning even a carefully prepared proposal might be knocked back by the Supreme Administrative Court. The new filing would not be made public until it had been seen by both DS officials and the court, he said. A filing by the Interior Ministry last spring was rejected because it lacked required evidence.
Source: most Czech press

ČSSD: Fischer’s cabinet should stay on until elections
Social Democratic leader Jiří Paroubek said yesterday his party wants current caretaker cabinet to stay in office, citing public polls which show 55% of Czechs trust the Fischer government. Rival Civic Democrats have demanded a confidence vote in the current administration, giving it approval to go ahead with Finance Minister Janota’s budget cuts.
Source: ČTK, MfD A1, A2

Klaus backs Janota’s ‘balanced’ budget
Finance Minister Eduard Janota yesterday met with President Václav Klaus, who gave his support to the minister’s proposals for cuts to the budget. Janota said he wants a budget that balances tax hikes with spending, adding the current proposal is already a political compromise. Party representatives will meet tomorrow to discuss the proposed budget.
Source: ČTK

Ombudsman targets discrimination
Ombudsman Otakar Motejl has endorsed his mandate to fight discrimination, offering strategic help to those in need. The office’s experience suggests that though the term ‘discrimination’ is widely used, many do not know its legal definition. Motejl said he would therefore help people to determine whether they had a valid discrimination claim.
Source: ČTK

Parties dispute budget deficit solutions
The Social Democrats and Civic Democrats differ greatly on their solutions to the budget deficit, with ODS wanting to raise VAT, but not change taxes, and ČSSD planning tax hikes for those with incomes over CZK 100,000. ČSSD has also rejected ODS’s proposal to cut social welfare benefits. Parliament is due to discuss the budget deficit tomorrow.
Source: most Czech press

Slamečka: New ČSA board must placate unions
Transport Minister Gustáv Slamečka told ČTK yesterday the new executive board of the Czech Airlines must talk to trade unions about austerity measures for the company, adding that it must find a way to calm down employees. The next step is to evaluate the current rescue plan for the airline, he said.
Source: ČTK

ČNB threatens higher interest rates
Czech National Bank (ČNB) board member Pavel Řežábek told Bloomberg that the growing budget deficit might force the central bank to increase interest rates before the economy recovers from the recession. The current base interest rate is 1.25%, the lowest level in the country’s history.
Source: ČTK

TranMin approves record budget with some cuts
The State Transport Infrastructure Fund has been allocated a record CZK 96 billion for the coming year under a trimmed budget backed by the Transport Ministry. Transport Minister Gustáv Slamečka said the ministry would need another CZK 23 billion to cover all planned projects and construction of the D1 and Austria-bound R52 and R55 motorways, among others, would be halted.
Source: most Czech press

MfD: Russian govt might be linked to Temelín
Mladá fronta Dnes raises questions about the Russian government’s role in Slovak company, CEEI, which was appointed by ČEZ to build storage space for Temelín’s nuclear waste. CEEI is owned by Liechtenstein-based U.B.I.E., whose administrative board is headed by the honorary Russian consul to Liechtenstein Markus Büchel. Although ČEZ denies Russian involvement in the deal, Jan Fischer intends to probe the issue, his spokesman told MfD.
Source: MfD B1, B3

Crown firms sharply against euro
The Czech crown climbed last night to 25.13 against the euro in the highest result since November 2008, supporting claims that domestic political instability is not disrupting business. Experts quoted by HN say investors are pinning hopes on higher-risk currencies as the world economy slowly recovers.
Source: HN 1, 27

T-Mobile makes solid entry in land-line market
Mobile operator T-Mobile has bought the retail base of České Radiokomunikace, taking over more than 100,000 residential customers and 130 workers. The acquisition makes T-Mobile the second largest provider of land-line services in the country after Telefónica O2.
Source: most Czech press

Developer: Flat prices might rise by 5% in 2010
The Czech apartment market has already hit rock bottom, said Dušan Kunovský, the majority owner of real estate developer Central Group yesterday. He added the market would likely pick up in spring 2010, with prices rising by an average 5% year-on- year. The price of some flats in prefabricated buildings could fall, however, by a further 20%, he said.
Source: ČTK

Mortgage interest up in August
Fincentrum Hypoindex results show that the average interest rates for new mortgages rose slightly in August to 5.67%. The volume of mortgage contracts fell by almost 30% year-on-year to CZK 5.45 billion.
Source: ČTK, Právo 16

Unilever to shut Czech plant
British-Dutch food manufacturer Unilever will close its plant in Nelahozeves by Q2 of 2010, relocating production to Poland and Romania and sacking some 634 employees. CEO Antonín Jiroušek blamed the closure on the financial crisis.
Source: most Czech press

Ekonom: ČSA seeks new head
The weekly Ekonom reports Czech Airlines (ČSA) is looking for a new CEO to be endorsed by the airline’s emergency advisory committee. Among the mentioned candidates are Radomír Šimek, CFO of Siemens Czech Republic and former ČSA CEO Antonín Jakub.
Source: HN 21

Komerční banka has almost 400 Czech branches
Komerční banka has almost finished building its network in the Czech Republic, spokeswoman Monika Klucová told portal, saying the bank now has local 397 branches, up from 320 in 2002 and close to the long-term goal of 400.

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