Coalition leaders on Wednesday approved a state budget deficit of 105 billion Czech crowns for 2012. In addition, the leaders of the three-party, right-of-center government coalition approved a hike in the lower VAT rate from 10 to 14 percent, while the current higher VAT rate will remain at its current 20 percent level next year. In 2013, the lower VAT rate will be further increased to 17.5 percent. A controversial proposal brought forward by Finance Minister Miroslav Kalousek to unify both VATs to a rate of 19 percent was not approved. Both the Civic Democrats and the TOP 09 party had supported this proposal. However, junior coalition member Public Affairs opposed the plan, arguing that the middle-class and low-income groups would bear the brunt of the fiscal reforms. Two thirds of the population also is against the unified VAT rate, according to a survey published by the Public Opinion Research Center in July.
In related news, the Public Affairs party announced on Wednesday that the party does not agree with the proposal for next year’s draft budget. Public Affairs plans to further debate state budget priorities and the financial needs of individual ministries with its coalition partners. Public Affairs leader Radek John said that especially the planned budget for the transport ministry, which is headed by his party, is too low. He stressed that he does not agree with Finance Minister Miroslav Kalousek, who maintains that the transport ministry’s budget could not be increased without introducing a unified VAT rate of 19 percent, a step that Public Affairs oppose. Mr. John added that funds to boost the ministry’s 2012 budget would not necessarily have to come from a hike in VAT.
The government has called on Interior Minister Jan Kubice to prepare a proposal to ban the Communist Party. According to information published by the Czech News Agency ČTK on Wednesday, the government has decided to follow through with its effort to outlaw the party despite the fact that a report published by the Interior Ministry in July found that attempts to ban the party based on its political program would legally be on very thin ice. The head of the Communist Party Vojtěch Filip said that the government was politicizing the issue and would embarrass itself internationally by going through with the attempt to ban his party.
The Senate on Wednesday approved a proposal that officially recognizes former active members of the anti-communist resistance. Under the new legislation, those who fought against the communist regime will be awarded 100,000 Czech crowns in recognition of their merit. Widowed spouses of resistance fighters are to receive half that amount. In addition, members of the resistance with lower-than-average pensions will see their monthly payments elevated to the average level of pensions in the Czech Republic. Whether a citizen can be considered a former active member of the anti-communist resistance will be determined by the Security Services Archive. The proposal is now set to be signed into law by President Václav Klaus and should come into effect on November 17, the Struggle for Freedom and Democracy Day, which is a national holiday.
Police evacuated close to 3,500 people from a Liberec district on Tuesday evening after an unexploded WWII flying bomb was unearthed by construction workers in the vicinity of two large shopping centers. Explosives experts advised extreme caution saying that if it went off the bomb was likely to injure people and cause damage to property in a one kilometer radius. The evacuation effort took several hours after which the 100-kilo bomb was removed and detonated at the former military site in Ralsko. No one was hurt in the incident.
Forrest workers have started removing the bark from bark-beetle infested trees near the village of Modrava in the Šumava National Park on Wednesday. About a dozen environmentalists, some from the Czech branch of the NGO Friends of the Earth, have been camping out in a protected part of the nature reserve since Friday, ready to physically prevent the logging of bark-beetle infested trees. However, one of the protesters said on Wednesday that the environmentalists are not opposed to the removal of bark from infested trees and therefore would not interfere with this work. He added that unlike logging perfectly health trees, this actually targets those that are indeed infested. Activists say that the park management had failed to obtain an exemption required to cut in the most protected parts of the park, but that it had some 3,000 trees marked in the area for logging. Loggers reportedly arrived in the vicinity on Tuesday but headed for a different part of the forest.
According to a fresh survey published by KMPG, one of the largest international services firms, about a third of the Czech Republic’s top managers are skeptical regarding the future of the euro. In Europe, only about a quarter responded similarly. Some three-quarters of respondents polled in the Czech Republic said that the EU is becoming a less important institution and predicted that this development would continue in the future. While 63 percent of Czech leaders of big companies believe adapting to changing customer demands is crucial to remaining competitive, only 24 percent of international company directors said they considered it an important factor.
Two Czech children are in critical condition following a traffic accident on a highway in Croatia on Wednesday morning. The accident occurred when the car in which a five-member Czech family was travelling swerved off the road, hit the crash barrier and flipped over several times before coming to a halt. All passengers were catapulted out of the car. The parents and a third child were severely injured but are no longer in critical condition. Police are investigating the cause of the accident.
Heavy rains that hit Prague on Wednesday afternoon have flooded the Vyšehrad metro station. The floodwaters inundated the technical controls room of the metro station. A spokesperson for the Prague Public Transport Company said that the metro service between the Vyšehrad and the I.P. Pavlova station, one of the city’s main thoroughfares, has been interrupted in both directions. It is not yet clear how long the interruption will prevail.
Strong rain showers are predicted to hit the north-west of the Czech Republic on Wednesday. The Czech Hydrometeorological Institute has warned that in some locations, precipitation could reach up to 50 milliliters within 24 hours. Rain showers are expected to continue through the beginning of next week, with mountainous areas in the north-west affected most.
The coming days will be colder, with overcast skies, rain showers and daytime highs between 17 and 20 degrees Celsius.