Daily news summary News


Grebenicek signals reversal in Communist position on no-confidence vote after two-hour meeting with Gross

The embattled Czech Prime Minister, Stanislav Gross, will face a parliamentary vote of no-confidence on Friday. The announcement comes as the leadership of the Christian Democratic Party, a junior partner in Mr Gross' ruling coalition, said on Wednesday it would leave the government if he continues as premier; party leader Miroslav Kalousek said all Christian Democrat ministers (foreign affairs, transport, environment) will resign on Thursday.

Separately, the head of the opposition Communist Party, Miroslav Grebenicek, who earlier this week had said he would urge his colleagues to support the no-confidence motion, said after a two-hour meeting on Wednesday with Mr Gross that his deputies might not vote against him after all. Mr Grebenicek said that the policies of the centre-right Civic Democrats, the main opposition party, which had called for the vote, were more of a concern to the Communists than were the past mistakes of the current government.

The no-confidence vote stems from calls for Prime Minister Gross to step down over alleged discrepancies in his personal finances, including his purchase of a luxury apartment in Prague six years ago, as well as his wife Sarka Grossova's business activities.

Lower house of Parliament votes to dismantle National Property Fund at year's end

Staying with politics, the lower house of Parliament approved a law on Wednesday that would dismantle the Czech Republic's privatisation agency by the end of this year. If approved by the Senate and ratified by President Vaclav Klaus, the law would have the Finance Ministry take over the government's remaining privatization agenda as of 2006. The National Property Fund has been holding stakes in state-owned companies on behalf of the government since its creation in 1991. The Fund also has been organizing privatization tenders and is now working on the sale of the state's majority stake in Cesky Telecom, the dominant fixed-line operator.

Final Cabinet decision on Cesky Telecom privatisation expected after Friday's no-confidence vote

In related news, the Cabinet is expected to decide on how to continue with the privatisation of Cesky Telecom — that is by tender or through a flotation of shares — following the results of the no-confidence vote in prime minister Stanislav Gross on Friday. The government's privatisation commission was meeting on Wednesday to discuss bids, which include telecommunication companies Swisscom, Belgacom, Spain's Telefonica and a grouping of Blackstone, CVC, Provident partnered with France Telecom. Media reports suggest binding bids went as high as 73 billion crowns (over $3 billion).

Czech, Polish central banks expected to follow Hungary's lead and cut interest rates

The Czech and Polish central banks are expected to follow on Hungary's move on Tuesday to cut interest rates by a half percentage point, to 7.75 percent. Currencies in the central European region have appreciated sharply against the euro over the past year, but have fallen back more recently, over forecasts that growth in the region is slowing. The Czech central bank already cut rates in January, lowering the two-week repo rate by a quarter of a percentage point, to 2.25 per cent. But with the new, more pro-business central bank board now in place, analysts expect another quarter percentage point cut on Thursday, with concerns over the impact of a strong Czech crown on the domestic industry outweighing the boards' concerns over inflationary pressure.

Reactor shut down at Temelin nuclear power plant for the second time since Sunday

A reactor at the Temelin nuclear power station in the southern part of the Czech Republic was shut down on Wednesday due to a fault in a power turbine, and is expected to remain offline for about two weeks. A reactor was last shut down at the plant, which lies about 50 kilometres from the Austrian border, on Sunday evening, and was restarted on Monday morning. Czech officials said the most recent fault at Temelin was not located in a part of the plant close to nuclear fuel and said that the second reactor at Temelin was functioning normally.

Lower house of Parliament votes for tougher controls on taxi drivers, including metres with memory

In other news, the lower house of Parliament has passed an amendment to the law on road transport, introducing stricter conditions on taxi drivers, including an officially sealed taximeter that issues printed receipts, and an internal memory chip storing the previous month's fare data. The amendment was drafted by the Prague City Hall, which is attempting to crack down on the overcharging of passengers, in particular tourists.


In the coming days we can expect cloudy skies but little or no rain, with daytime highs due to remain in the low teens (Celsius) through the weekend.