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The Czech Republic has tentatively agreed to consider support for an intergovernmental fiscal agreement which would introduce a tougher debt and deficit regime for those EU members who commit to it. Eurozone leaders agreed to seal a separate treaty on fiscal union after several countries including Britain and the Czech Republic effectively blocked a revision of the Lisbon treaty. The new fiscal agreement should be endorsed by all 17 euro zone countries and any others who wish to make the commitment. The Czech prime minister said Prague welcomed any moves to stabilize the euro-zone, but would have to consult its parliament on making a far-reaching fiscal commitment. Sweden has also said it would have to put the matter to its parliament. Britain refused to support the deal after failing to secure concessions for itself, and Hungary has also refused to join.

President Klaus, a staunch Eurosceptic and conservative, on Friday welcomed the development saying the EU had made a pragmatic decision and the Czech delegation had handled the matter well. Opposition leader Bohuslav Sobotka has called for a nationwide debate on the Czech Republic’s stand in this matter. He said the Czech Republic was at a crossroads where it could either support further integration of face increasing isolation.

Companies in the Czech Republic that illegally employ foreigners will be fined up to five million crowns and will lose the right to public orders and state subsidies, under an amendment to the law approved by the Senate on Friday. The amendment aims to bring Czech law in line with EU directives. It obliges companies to report signing on foreigners from non-EU countries and to keep copies of the employees’ documents proving their legal workforce status. The bill is yet to be signed into law by the president.

The Czech inflation rate hit an 11-month high in November on rising prices of food as the central bank is debating whether to cut interest rates amid slowing economic growth. Food and non-alcoholic beverages led the price growth, rising 5.3 percent year-on-year, while the cost of alcohol and tobacco products rose 2.8 percent and transportation cost was up 4.4 percent from 2010, the Czech Statistical Office said.

The Tibetan spiritual leader, Dalai Lama, is expected to arrive in Prague on Saturday for a three-day visit at the invitation of ex-president Vaclav Havel and Forum 2,000 of which the Dalai Lama is co-founder. The Tibetan spiritual leader will be speaking at Charles University on the subject of China and its human rights record and he is expected to lead a debate on the search for happiness in an uncertain world. Dalai Lama is a close friend of Mr. Havel’s and visits the Czech Republic fairly often. He was last here two years ago.

President Klaus has criticized the centre-right cabinet saying it was weaker and less efficient than one would have expected from a government with a strong majority in Parliament. Speaking at a gathering of business leaders Mr. Klaus said this was due to both to differences over how to proceed with reforms and a series of scandals attached to cabinet members from all the coalition parties. Corruption scandals and political clashes have led to the replacement of 7 cabinet ministers within the space of a year. Despite these problems, the Necas cabinet has pushed ahead with reforms in the face of a looming recession in Europe.

According to the results of a demographic study the Czech Republic may face a sharp population decline in the coming decades. The study, which assesses the impact of various demographic developments on the pension system, says that if the present trend continues the Czech Republic could have only 6,5 million inhabitants in 90 years’ time compared to the present 10.5 million. Czech women now have 1.5 offspring on average and the dire forecast is based on a drop 1.4 in the near future.

Four of the five youths who are being tried for a brutal machete attack on a bar in the town of Novy Bor, in north Bohemia, will now be tried for attempted murder. The regional State Attorney’s Office re-assess the crime from inflicting grievous bodily harm to attempted murder on the grounds of fresh evidence and a new expert study. Three of the five suspects are behind bars, police are still searching for the other two.

Police are questioning a 20-year-old Greek national after customs officers discovered 2 kilograms of cocaine in his luggage. The drug was hidden in a spaghetti press and its value on the black market is estimated at around four million crowns. The passenger was travelling from Rio de Janeiro to Portugal and then Prague. If convicted of drugs smuggling he could face up to 12 years in prison.

The world famous Spanish tenor Jose Carreras will be giving a Christmas concert at Prague’s 02 Arena on Saturday. Mr. Carreras who will perform well-known pieces such as Cantique de Noel, I'll be home for Christmas or Ave Maria will be accompanied by Czech Radio’s Symphony Orchestra. At a press conference in Prague on Friday the world famous tenor said he regretted not having more time to enjoy the city. He has performed in Prague several times, most recently in 2008.