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Breakfast Brief – 28 July 2009

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Table of Contents

ČR expands exit plan for illegals
Foreigners staying illegally in the Czech Republic who report to authorities and leave the country between 15 September and 15 December will face a shorter ban on re-entry than if they were caught and deported, the Interior Ministry said yesterday. The government will buy air tickets for those lacking funds, but they will be barred from re-entry for longer than those paying for their own trip home.

EU offers sympathy, not help in Canada dispute
EU foreign ministers in Brussels expressed solidarity with the Czech Republic in its ongoing dispute with Canada over its introduction of tourist visas for Czech nations. The ministers suggested no retaliatory measures, such as the introduction of visas for Canadian tourists to the EU.
most Czech press

HN: MPs receive excessive transport bonuses
Hospodářské noviny reports that almost CZK 66 million a year is spent on MPs’ transport bonuses which are being used for other purposes. HN claims that MPs living outside Prague receive between CZK 22,000 and CZK 34,000 in monthly transport bonuses, which should allow them to visit Prague several times a day and still save money.
HN 1-3

Towns to get CZK 2bn for administration
As of 2010, Czech municipalities will receive CZK 2bn to cover state administration expenses, said Oldřich Vlasák, chairman of the Union of Towns and Municipalities. A Prague University of Economics study has shown that some towns dedicate as much as 70% of their budget to administrative expenses.
most Czech press

Czech-Vietnamese association must defend prosecuted firm
The Czech customs office has rejected an appeal from the Czech-Vietnamese association, which the office earlier named as guarantor for a Vietnamese company Himiamex that is charged with selling imitations of well-known textile products. The association maintains it is a civic organisation lacking the personnel to handle the case and it does not wish to defend the interests of a firm acting illegally. HN reports that the customs office initially targeted the Czech-Vietnamese association based on the mere presence of the word “Vietnamese” in its title.
HN 5

Swine flu numbers reach 63 at weekend
Another 20 cases of swine flu diagnosed over the last weekend have taken the total number of Czechs affected to 63, the Health Ministry said yesterday.
Právo 1, 2

KDU-ČSL oppose new Brno mosque
The Christian Democrats have opposed the planned construction of a second mosque in Brno. Regional party leader Stanislav Juránek said Muslims who wish to live in the Czech Republic should adapt to local practices. “It would be a big mistake to let [local traditions] be crowded out by a foreign culture and religion,” he added. Muníb Hasan from the Brno Islamic Foundation said that Brno Muslims had always denounced extremism.
LN 5, Právo 3

15th flood casualty found in Děčín
The number of deaths claimed by Czech floods earlier this summer has reached 15. Police at the Děčín dock yesterday found a corpse which has been confirmed as the body of a woman swept away by the floods in early July.

PX Index hits highest level since October 2008
The PX Index closed at 993 percentage points yesterday in its highest result seen since October last year. The result represents a 58% increase since mid-February, when the index plummeted to its lowest point this year. David Marek of Patria Finance said a slight adjustment was to be expected. Other analysts such as Jiří Zendulka of Capital Partners and Ondřej Moravanský of Cyrrus predicted more growth in the future.
most Czech press

Public deficit to exceed CZK 200bn
Finance Minister Eduard Janota said yesterday that the 2010 public finance deficit would total more than CZK 200 billion instead of the CZK 170bn announced earlier. The state budget must be revised to address the worsened economic outlook, he said. PM Jan Fischer said there was little room for budget cuts as mandatory expenses make up 80% of the budget.
HN 1, 4, 8, E15 3, ČTK

Moody’s forecasts defaults on consumer loans in ČR
Up to 10.5% of those with consumer loans from banks in the Czech Republic will default on repayments according to the latest forecast of rating agency Moody’s, which put the cost at some CZK 20 billion. The Czech central bank expects the number of affected bank loans to reach 8% by the end of the year, doubling the figure this January. Up to 60% of families in debt might have trouble re-paying their loans, the bank said.
E15 1, 8

Farmers lose millions to bad weather
A recent Agrarian Chamber study has put the cost of damage caused by torrential rain and hail in the Czech Republic in the past month at CZK 650 million. Jan Veleba, head of the chamber, said 6% of fields growing grains have been damaged. It is not yet clear how much the damage will affect the prices of agricultural commodities.
LN 13

PPF-ECM property fund gets green light
The antimonopoly office has given the go-ahead to FCP, a specialist real estate fund, formed by PPF Group and five subsidiaries of ECM Group. ECM said this is the first step towards the establishment of the PPF ECM Holding real estate group.
ČTK, E15 8

EIB provides loans for struggling SMEs
The European Investment Bank (EIB) and UniCredit will provide EUR 11 billion in loans to battling small and medium-sized businesses in Central and Eastern Europe and in Turkey.

Škoda Holding seals CZK 2.1bn contract
Škoda Transportation and Škoda Vagonka Ostrava have signed a CZK 2.1 billion contract to manufacture 10 suburban trains and modernise two electric locomotives for the Slovak national rail carrier ŽSSK in 2010-2013. Both suppliers are part of Škoda Holding, which has no ownership relation with Škoda Auto.
E15 6

ČSÚ: Czech businesses optimistic, consumers doubtful
The Czech Statistical Office (ČSÚ) has reported that confidence in the Czech economy rose by 0.8 points in July, still 23 points less than last year. The growing confidence of entrepreneurs, especially in heavy industries, was said to be behind the increase. Consumers’ expectations over the same period fell sharply, with more people expecting their financial situation to worsen over the next 12 months and more fearing unemployment due to the recession.

Ministers OK rescue loan to Latvia
Czech cabinet yesterday approved an agreement to lend Latvia EUR 200 million to deal with the financial crisis. The government plans to raise the cash by selling bonds.
ČTK, LN 15

Analysts: Summer will make or break struggling firms
Results this summer will determine the survival of several Czech companies now facing bankruptcy, according to analysts Pavel Sobíšek of UniCredit Bank and Libor Nevšímal of real estate company Naxos. The Association of Small and Medium-Sized Entreprises and Crafts has warned about the presence of speculating buyers that prey on small indebted companies.
LN 13

Online auctions on the rise in ČR
In a growing trend, the biggest Czech online auction website recorded a 62% surge in its sales in the first four months of this year, with 1.3 million registered users. In July, the site registered 577,000 auctions per day, compared to 257,000 auctions in the same month last year.
HN 16

Czech cement output down 25% in H1
In the first half of 2009, the Czech Republic produced 1.6 million tonnes of cement, some 25% less than a year earlier. Manufacturers blame a cold winter and the economic downturn.

Head of Czech Siemens retires after 15 years
The Czech branch of Siemens yesterday confirmed the retirement of CEO Pavel Kafka (60) at the end of this year after 15 years in office. Eduard Palíšek (46) will take over from January.

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