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Czech police have detained two Germans suspected of abusing underage boys and girls from the Klatovy region in the west of the Czech Republic, a spokeswoman told AFP on Wednesday. One of the detained men is a 47-year-old from the Rhineland Palatinate region in western Germany, the other a 60-year-old from Deggendorf in Bavaria. The men gained the children's trust, lured them into a caravan and had sexual relations with them on several different occasions, according to a Klatovy police spokeswoman. Czech and German police have been jointly investigating the cases for several months.

Customs officers in Melnik, central Bohemia, have seized fake U.S. dollars and Vietnamese dong banknotes worth over 300 million crowns, Prague Customs Authority spokesman Zdenek Malek told the CTK news agency on Wednesday. The notes, stashed among paper towels, were discovered during a routine check of a container from Vietnam. The recipient of the notes said they were just pieces of paper to be used in a religious ceremony. Experts are now analyzing the forgeries.

President Vaclav Klaus says he is ready to appoint Mr Topolanek the country's next prime minister despite the fact that his newly-formed centre-right coalition lacks a majority in the lower house. Mr. Klaus received the text of the coalition agreement between the Civic Democrats, Christian Democrats and the Greens on Tuesday evening and described the alliance as "the most promising post-election scenario".

The country's leading trade union organization has slammed the centre-right coalition agreement signed by the Civic Democrats, Christian Democrats and the Greens, saying that the programme outlined would benefit the rich and hurt the poor and middle-classes. The head of the Confederation of Czech and Moravian trade unions, Milan Stech, said that the agreed on tax reform would hurt not only family budgets but possibly local budgets as well, since there was no indication of how the state budget would compensate for lower tax revenues.

Fixed-line operator Cesky Telecom and its mobile arm Eurotel will merge on July 1 and will begin operating under a new brand name, Telefonica O2 Czech Republic, representatives of the companies told journalists today. Cesky Telecom CEO Jamie Smith said that most of the rebranding for the merged unit should be completed by the end of the year. In the first year of its existence the new company will merge sale and customer care, in the second year it will focus on the domestic market segmentation and in the third year on IT integration. Telefonica of Spain bought Cesky Telecom last year, and now controls 70 percent of the company. Telecom is the sole owner of Eurotel.

Prime Minister Jiri Paroubek announced on Wednesday that he will resign after an extraordinary government session on July 3, triggering the fall of his government and opening the way for a new administration. The move will allow President Vaclav Klaus to appoint Civic Democrat chairman Mirek Topolanek as the next prime minister. Mr. Topolanek has managed to form a three party centre-right coalition but he lacks a majority in Parliament, where the left and right parties hold a hundred seats each.

Meanwhile the outgoing Prime Minister Jiri Paroubek has indicated that he too would like a chance to form the next government, should the centre-right coalition fail to win approval in the lower house. Mr. Paroubek, whose Social Democrats came second in the elections, said on Tuesday that he was confident he could assemble the necessary 101 votes, and that under such circumstances President Klaus would have no choice but to entrust him with the task of forming a new cabinet.

The Rolling Stones will not appear in the Czech Republic this summer, after plans to reschedule a date in Brno were abandoned. The British rock band had been due to play in the Moravian capital in mid-June, but pulled out when guitarist Keith Richards underwent an operation. The Rolling Stones have appeared in Prague four times in the past decade and a half.

As Czech meteorologists warned, powerful summer storms hit some parts of the Czech Republic on Tuesday. Strong winds have caused serious damage in the south Moravian region surrounding Zlin. Firefighters are dealing with uprooted trees and downed electrical lines. Trees have blocked roads and damaged parked vehicles. Heavy rain in the region has also flooded many cellars, said a spokesman from the local fire department. Storms are expected to strike again in several Moravian regions, bringing heavy rains, winds, and hail.

Subject to similar drastic weather conditions, the chateau of Pohanska near Breclav, has been damaged by a hailstorm. The daily Pravo writes that the chateau looks as though it was the victim of a military firing squad. There is extensive damage to chateau Pohanska's façade, and eight windows were broken as a result of the storm.

Despite earlier assertions by the Social Democrats which claimed they would re-nominate Lubomir Zaoralek for chairman of the lower house, they failed to do so in Tuesday's sitting. Reports say this decision came after the Social Democrats failed to secure behind-the-scenes majority support for Mr. Zaoralek's nomination. The deputy chairwoman of the Civic Democratic Party, Miroslava Nemcova, is thus the only nominee for the lead post in the lower house. Her election to the post will depend on the vote of at least one Social Democratic or Communist MP. MPs are scheduled to cast their secret ballots on Thursday morning.