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CZECH REPUBLIC


 



Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 85,438 69,590 56,800 39
         
GNI per capita
 US $ 6,740 5,560 5,250 66
Ranking is given out of 208 nations - (data from the World Bank)

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Update No: 118 - (29/03/07)

Competition for Czech president starts, Klaus to win - press
Czech President Vaclav Klaus is a popular figure in the country. He is a Eurosceptic, a conservative and an admirer of Thatcher. He has started the campaign for the 2008 presidential election in an American-like style and he is likely to be re-elected next year, Martin Fendrych writes in the latest issue of the weekly Tyden.

Though a presidential candidate is elected by upper and lower house members, Klaus had not waited for any party to nominate him. Exactly twelve months before his mandate is to end, he announced that he would seek re-election, Fendrych writes.

Klaus did not wait for the ruling Civic Democrats (ODS) - the right-wing party Klaus founded in 1991 - to finally decide to nominate him because of his recent disputes with the party and its leader, Prime Minister Mirek Topolanek.

Why did Klaus take such a step? Well, he definitely knows what he is doing. His opponents were not prepared for such a move. Other parties are discussing whom they will nominate. It comes out that they actually have no candidates.

This is what Klaus wanted to show: make an impression that he is the only possible and acceptable candidate, the author writes in Tyden.

The most dangerous for Klaus are the senior opposition Social Democrats (CSSD) of Jiri Paroubek. The CSSD may have reckoned with former party head and former prime minister Milos Zeman as a possible presidential candidate. But Zeman and Paroubek do not get on well.

Paroubek knows the situation is bad both for him and his party: the CSSD lost the general election last June, it lost the autumn elections to the Senate, and it may lose the presidential election. As a result, Paroubek wants to form a coalition against Klaus that would field a strong candidate.

The left can defeat Klaus as president only with a candidate who will win the support from the Green Party and possibly from individual senators and deputies of the Christian Democrats (KDU-CSL) and the Civic Democrats. But the right-wing will definitely support Klaus.

If an extraordinary woman ran against Klaus, he could have problems in the fight. Zeman proposed former supreme state attorney Marie Benesova as president.

"Well, Benesova has no chance to succeed and Zeman in fact was not serious when he mentioned her. It was one of his typical provocations," Fendrych writes.

The chances of Social Democrat former minister Petra Buzkova as presidential candidate are close to nil, too. In short, Czech parties have no strong woman among their members who could run against Klaus and defeat him. Parties would have to nominate a woman who is not an active politician, but this would be too much for them - a woman who does not come from politics.

Several people were named as possible candidates for president. One of them is Karel Schwarzenberg, now Foreign Minister. But an heir of a wealthy noble family has no chance in the Czech Republic, Fendrych writes.

He says that priest and professor Tomas Halik would be a good candidate as he is an intelligent, charismatic man. Whatever Halik's qualities may be, he is a Catholic priest, which means that like nobleman Schwarzenberg he is not acceptable as Czech president.
Some Social Democrats favour Jiri Dienstbier, a former communist, then spokesman for the Charter 77 human right manifesto and imprisoned dissident under the former regime. Former foreign minister Dienstbier remains attractive for women despite his age and he is not pro-American, which is something the left would be happy about.

Dienstbier could run against Klaus, the author points out.

There are other politicians whom the left could nominate - Vladimir Dlouhy is an example.

A communist party member before 1989, a minister and member of the right-wing ODA party in the 1990s when he also was the most popular Czech politician, Dlouhy could be nominated not only by the left-wing parties, but also by centrist or right-wing politicians.
At present, Dlouhy is an international aide to the Goldman Sachs investment bank.

The Social Democrats could choose a candidate like Dlouhy - a popular and internationally known person. But Paroubek has been running behind the car steered by Klaus. He tries to harm Klaus by arguing that he is a president of the ODS, and not of the whole of Czech Republic.

However, anybody who had been following the protracted government forming negotiations after the 2006 elections knows that what Paroubek claims is not true. Klaus sided with Paroubek rather than Topolanek, the author writes.

It is ninety-percent sure that Klaus will be re-elected as president. The left is not capable of fielding a strong candidate and the right will not agree on any other - new and more interesting - candidate than Klaus because the Civic Democrats would not accept him or her, Fendrych concludes in Tyden.

Topolanek Party Reaches 40% in Czech Republic
If Klaus looks secure in the presidency, Topolanek does now in the premiership. The ODS has extended its lead in the Czech Republic, according to a poll by Median. 40.5 per cent of respondents would support the ODS in the next election to the Chamber of Representatives, not to be held until 2010.
The CSSD is second with 25.4 per cent, followed by the Communist Party of Bohemia and Moravia (KSCM) with 12.6 per cent, the Green Party (SZ) with 8.2 per cent, and the Christian and Democratic Union - Czech People's Party (KDU-CSL) with 7.4 per cent.

In early June 2006, Czech voters renewed the Chamber of Representatives. Final results gave the ODS 35.58 per cent of all cast ballots, followed by the CSSD with 32.32 per cent. Czech parties require at least five per cent of the vote to earn seats under the country's proportional representation system. The final tallies give the ODS, the KDU-CSL and the SZ 100 seats in the lower house, with the remaining 100 seats going to the CSSD and the KSCM.

The tie among rival factions led to a long political stalemate. On Jan. 9, Czech president Vaclav Klaus re-appointed ODS leader Mirek Topolanek as prime minister. On Jan. 19, the government won a confidence motion in the Chamber of Representatives after a 100-97 vote. 

On Mar. 12, the three governing parties said they would seek to pave the way for the country's adoption of the euro in 2008. Finance minister Miroslav Kalousek discussed the situation, saying, "We expect very justified criticism from the European Commission. There's no threat of any sanctions if the government manages to persuade the EU it is serious about its plans to overhaul spending."

The Euro has been used in 12 of 15 European Union (EU) countries since January 2002. At the time, Sweden, Denmark and Britain were the only EU members that did not adopt the currency. The European Central Bank has set a fiscal deficit limit of 3.0 per cent to allow other member nations to adopt the Euro.

U.S. experts to arrive in Prague in April over radar base 
In a very controversial move, the USA asked the Czech Republic for the stationing of a radar base on Czech territory by an official note in January. The Czech coalition cabinet of Mirek Topolanek (Civic Democrats, ODS) intends to answer by the end of March. 

The government is expected to announce it is ready to launch talks with the USA on the radar base. The USA would like to complete the talks this year. 

The USA would like to build a missile defence base in Poland that would be interconnected with a radar system placed in the Czech Republic, on the military training grounds Brdy, southwest of Prague. 

According to polls, most Czechs do not support the building of a U.S. radar in the Czech Republic. 

Prague- Henry Obering, head of the U.S. Missile Defence Agency (MDA), and other U.S. experts are to arrive in the Czech Republic in April to discuss the possible stationing of a U.S. radar defence base on Czech territory, U.S. Ambassador to the Czech Republic Richard Graber told reporters after a meeting with Czech Social Democrat (CSSD) chairman Jiri Paroubek. 

Graber added that the exact date of the U.S. experts' visit had not been determined yet. The Czech Republic should by then answer the U.S. diplomatic note and say whether it would negotiate about the building of the U.S. base or not. 

Obering has already discussed the U.S. missile defence shield in NATO's headquarters in Brussels, in Ukraine and in Germany. His European tour should attenuate the tension stirred up by the planned U.S. bases in Poland and the Czech Republic. 

Paroubek told Graber repeatedly that his senior opposition CSSD keeps its negative stance on the U.S. base in the Czech Republic. "I have again indicated to the ambassador that we could change our stance if the base became part of a system within NATO," Paroubek said, adding that no progress has been made in this respect so far. "These matters are yet to develop, we will see," he added. 

Paroubek also invited Graber to the upcoming CSSD national congress in Brno and asked him for a short speech. "It would be nice if he [Graber] explained to the congress delegates the position of the U.S. administration, primarily in the case of a radar base and a missile defence system in Central Europe," said Paroubek. He noted that this is the only issue where the CSSD's and Graber's stances differ. 

Graber said that today's meeting with Paroubek was a regular consultation. Apart from the radar base, they also touched upon the issue of U.S. visas for Czech citizens. 

Paroubek asked Graber to "soften" the statements of some Czech government's members who unrealistically speak about soon lifting U.S. visas. "I personally think that this will happen in the future counted in months and not in weeks," said Paroubek. 

Five-decade disagreement over Czech-Polish border appears on way to resolution
The Czech Republic could get a tiny bit smaller in the next few years, if it hands almost 400 hectares of its territory over to Poland. There has been a disagreement about the two states' border for almost half a century - but that dispute could come to an end under the current Czech government.

In 1919 Czechoslovakia and Poland clashed briefly over Tesin in Silesia, when Prague sent its soldiers into the area. After an inconclusive battle, the Allies forced the two sides to agree to a new demarcation line.

However, even after a 1925 bi-lateral agreement, Warsaw continued to push for more territory. Eventually, a fresh agreement was concluded between the two states in the 1950s, which involved shortening the border by 70 or 80 kilometres.

Ultimately Poland lost out, with Czechoslovakia gaining 368 hectares of land. The new border cut straight through the properties of hundreds of Polish farmers in seven municipalities. The result is that part of those farms lie in what is now the Czech Republic, with farmers having to travel some distances to border crossings in order to work their land. They also have to pay taxes in both countries.

Talks on resolving the issue began in the early 1990s, but until recently didn't go anywhere. A breakthrough came in January, when Czech Prime Minister Mirek Topolanek visited Warsaw.

But speaking in Prague on Monday, Mr Topolanek said dealing with this "historical debt" would take more than mere months - he suggested a target of the end of the current Czech government's term, in 2010.

There has been some suggestion that resolving the dispute could involve financial compensation to Poland. But that would not satisfy Warsaw. Rafal Morawiec of Poland's embassy in Prague told Czech Television that his country does not want money - it is primarily concerned with the interests of Polish farmers.

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ENERGY

Czech utility company CEZ to supply electricity

Czech utility company CEZ announced plans to supply electricity to Albanian power company KESH, AENews reported. 
"This first trial supply might be followed by larger supplies in the next months," CEZ spokeswoman, Eva Novakova, was quoted as saying. CEZ currently trades electricity in nine Central and Southeastern European markets, and increasing this could help alleviate its slowly dwindling domestic market share, it was reported. "As its share of the electricity market in the Czech Republic drops, CEZ is aiming its sales activities at other countries," said Jakub Zidon, an analyst with bank Ceska sporitelna. CEZ now plans to expand its trading into the Balkans, it was reported. CEZ was cited as saying its overall share of the Czech end-customer electricity market is expected to drop this year to 53 per cent from 56 in 2005. In Albania, yearly electricity consumption only reaches 7.5 terawatt hours, while in comparison, demand in the Czech Republic reached 57.6 terawatt hours in 2005, it was reported. 
Albania, like other countries in the region, has been forced to import more electricity, presenting energy groups like CEZ with opportunities. CEZ is already one of four short-listed bidders for building a 2.5 billion Euro power plant in Kosovo. "The main focus of CEZ will still be to produce energy," said Jan Prochazka, an analyst with brokerage Cyrrus. 

RWE to build gas pipe from Czech Republic to Belgium

German energy company RWE said on February 5th it would build a new gas pipeline, through which Russian gas will be supplied from the Czech Republic across Germany to Belgium and also expand its power-plant capacity in the United Kingdom. At the moment gas going to Belgium is primarily transited through Germany and the Netherlands, New Europe reported.
However RWE Energy warned the gas pipeline project would be abandoned unless it won at least partial exemption from regulation by the German watchdog, the Federal Networks Agency, and the European Commission.
The planned pipeline, scheduled to come onstream in autumn 2011, would transport an annual volume of five billion cubic metres of gas and allow additional quantities of gas to be purchased from Russia, but also from the Middle East and Egypt, for sale in Germany and Britain.
RWE said it would invest about one billion Euro in this link, which would begin in Sayda, Germany, on the Czech border, and across Germany to the Aachen area to connect to the Belgian system. It would be open to other market players to book capacity on it before it was built.
"We are increasing the liquidity in the gas market," Deutsche-Presse-Agentur (dpa) quoted RWE chief executive Harry Roels, who addressed an energy conference in Essen, as saying. A package of investment in Britain worth 1.3 billion Euro would include construction of a "combined cycle" gas-turbine power plant, scheduled to start this year. The 2,000-megawatt site would be either at Staythorpe in Nottinghamshire or Pembroke in West Wales.
It would generate enough electricity for two million households. The British unit, RWE Npower, would also invest 150 million Euro in three new wind parks.

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FOOD & DRINK

Food sales increase 1.5% in 2006

Sales in the Czech food industry increased marginally last year by 1.5 per cent year-on-year, reaching 29 billion Czech crowns, preliminary data published by the Czech agriculture ministry showed recently, New Europe reported.
Food Chamber president, Jaroslav Camplik, said the sales remained basically unchanged for the third year running. "Among the main reasons is tougher competition on the market after the Czech Republic's entry in the EU when trade barriers were removed," according to Camplik. "We need to strengthen the position of domestic food products on the Czech market in competition with growing imports. The growth could also be pulled by exports," he added. In foreign trade in agricultural and food commodities, the Czech Republic's deficit grew by 30 per cent year-on-year to 32.7 billion crowns last year. Exports put on just one per cent while imports were eight per cent higher. Experts including those of the Czech Agricultural Chamber have predicted further widening of the trade deficit, also because retail chains are reducing the purchase of Czech food products, for example meat. Agriculture Minister, Petr Gandalovic, said on February 26th that it would be hard for the state to stand in the way of exports on the single European market. What it can do is to control that all quality norms and agreed conditions are met. Gandalovic does not see much space in support to exports inside the EU, either. "We will be looking for ways to open up markets in countries which are not EU members," he added. Experts noted that Czech revenues from food products were also affected by price developments last year. The prices fell by 0.5 per cent in that year. In constant 2000 prices, sales of food companies reached 215.6 billion crowns, up 2.2 per cent year-on-year.

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INFORMATION TECHNOLOGY

MTV eyes Czech market for 2008

As part of a sustained series of launches in Central and Eastern Europe, the music and youth TV station MTV is now eyeing the Czech market where it plans to unfold a local channel in 2008, website cbw.cz reported. 
"MTV is very keen to have a localised presence in the Czech Republic," said Bhavneet Singh, the acting general manager of MTV Emerging Markets, part of MTV Networks International (MTVNI). Singh, who delivered a keynote speech on March 2nd at an MTV conference on emerging youth trends in Prague, added that MTV was already in talks with one or two potential partners and hopes to finalise a deal soon. 

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