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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: 121 - (27/06/07)

Czech Leader Backs U.S. Missile Defence 
The Czech prime minister told a summit of 15 European leaders in May that a planned missile defence system, parts of which the United States wants to base in the Czech Republic and Poland, is vital to Europe's security. "The defence of Europe against missiles from some states and organizations is a necessary step which will significantly increase our security and also the security of our European allies and neighbours," Mirek Topolanek told the annual gathering of presidents from central, southern and eastern Europe.

The US made a formal request in January to place a radar base in a military area southwest of Prague and 10 interceptor missiles in neighbouring Poland as part of a planned global missile defence shield that Washington says would protect against a potential threat from Iran or North Korea. US officials have subsequently been travelling to Europe to discuss the proposal with their counterparts in Prague and Warsaw. The anti-missile system was very much on the agenda when President Bush visited the two NATO members during a trip to Europe in June, as we shall see.

The Czech and Polish governments have both been receptive to the idea, but the proposal has run into strong opposition from Russia, which says it could trigger a new arms race. Indeed, Putin threatened on June 3rd to retarget Europe with Russian missiles. Russia is also testing the RS-24, while the UK is about to go for a new generation of Tridents. It is as if everyone is nostalgic for the Cold War.

Bush visit fails to bolster wavering public support for missile defence shield 
Ahead of attending the G8 summit, US President George W Bush flew into the Czech Republic on June 5th for an official visit that observers say is aimed at bolstering support for controversial proposals to build a missile defence system in Eastern Europe. 

Opposition to the system, which if approved will be built mainly in the Czech Republic and Poland, is growing louder by the week from both neighbouring Russia - and, even more significantly, from among the general public itself in the Czech Republic. The latest survey in the Czech Republic indicates that some 60 percent of citizens are against the plan, while 73 percent believe a referendum should be called before it is given the go ahead. It would be lost of course so that the staunchly pro-US Czech leaders are not going to hold it Sometimes it is necessary to be economical with democracy. 

So far, the Czech government has held two rounds of talks with the United States over the base. In his meeting with Czech President Vaclav Klaus, President Bush tried to persuade the Czech side to lose its fears over Russian anger and give the plan the nod. "The people of the Czech Republic don't have to choose between being a friend of the United States, or a friend with Russia. You can be both," Bush said after talks with Klaus. 

Russia was the major concern of Bush's visit. Russian President Vladimir Putin has threatened to aim Russian missiles at Europe in response to the US plan, which would place a radar station in the Czech Republic and 10 missile interceptors in Poland. Bush said Russia does not have to fear of the system, insisting it was designed to protect Eastern Europe against "rogue states." 

Bush even invited Russia to "participate" in the programme, urging Moscow to send military staff and experts to the United States to learn about the technology. "The Cold War is over. It has ended," Bush said after his meeting with Klaus, adding that Russia is not an enemy of the United States and it has no reason to worry about the deployment of the system,

One thing is clear, however. While a proposed missile system straddling the Russian border remains in the offing, the spat between Moscow and Washington is sure to continue. 

Putin proposed alternative sites for the system in Azerbaijan or Turkey or even the sea. The story will run.

Czech villages reject US radar base in local plebiscites
For instance, the inhabitants of nine Czech municipalities in central and west Bohemia overwhelmingly rejected the construction of a US radar base on Czech territory, on the Brdy military grounds, in local referenda and one village in a poll on June 10th, five days after the Bush visit.

As it so happens, this is a poignent date in Czech history.

Czech president recalls Lidice's impact on Czech-German relations
Czech President Vaclav Klaus recalled the impact of the village Lidice's obliteration by Nazi troops during WW2 on Czech-German relations at a meeting commemorating the 65th anniversary of this massacre on June 10th. 

The 10th of June has been listed among the Czech Republic's special days since last year. It commemorates the tragic fate of Lidice on that day in 1942, before the tide had visibly turned in the Second World War. 

This tragedy terminated the willingness to consider the joint post-war cohabitation of Czechs and Germans after the war, Klaus said in his speech. Klaus called the obliteration of Lidice in 1942 a monstrous crime that became a catalyst of Czech-German relations. Afterwards, people not only in the Czech Lands but all over the world realised the consequences of Nazism, Klaus told CTK. 

Orthodox Church representative Jaroslav Suvarsky said that the assassination of Reinhard Heydrich, German Reichsprotector of Bohemia and Moravia, which became a pretext for the Lidice obliteration, was an act of just revenge. Suvarsky recalled that a number of Czechs who failed during WW2 and whose reports helped Nazis uncover the assassins also belong to Czech history. 

Andela Dvorakova, chairwoman of the Czech Association of Freedom Fighters, said that is is hard to find a balance for the commemoration of the Lidice event not to abuse the memory of the dead. She confirmed to CTK, she alluded to the abuse of Lidice in a computer game simulating the tragic event. 

Lidice Memorial director Milous Cervencl was presented with the Epica Bronze Finalist international award from marketing experts and the Czech Louskacek bronze prize for creativity in April for the controversial Internet advertisement called Total Burn-Out, simulating the Lidice obliteration.

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Thanks to the ad, more young Czechs have learnt about the tragic wartime massacre in Lidice, but it at the same time stirred up protests, mainly from the Czech Association of Freedom Fighters. 

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The player of the game can win points for each adult Czech shot to death or burnt and for burning down a house, but if he shoots a German fighter, he loses a lot of points. The player can also pick up weapons and grenades. Only after doing so, he/she can finally recognise that the game does not support Nazism but promotes the Lidice Memorial. "What are you playing at? It was no game in Lidice, but reality," another game inscription says. 

The Nazis burnt down Lidice and razed it to ground on June 10, 1942 in reaction to the assassination of Heydrich by Czech paratroopers trained in Britain. All of the village's 102 houses were burnt down, 173 male inhabitants executed on the spot and others later. Women and children were dragged to concentration camps. Most of the 104 children died in gas chambers in Chelmno, now Poland. Only 17 children survived. 

As a revenge for Heydrich's death, the Nazis also obliterated another Czech village, Lezaky, east Bohemia, and killed its inhabitants - 22 men, 21 women and 11 children. 

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AVIATION

Belavia offers regular Prague-Minsk flights 

Prague airport operator, Letiste Praha, announced in a press release that Belavia, the Belarusian flag carrier, started offering regular flights on May 15 between Prague and Minsk, Interfax News Agency reported. 
"Belarusian airlines Belavia on Tuesday (May 15th) launched operations on the new direct connection with Minsk," Prague airport spokesperson Eva Krejci was quoted as saying. Czech national carrier CSA already operates four weekly connections to Minsk, she said.
Belavia will offer flights between the Belarusian and Czech capitals three times a week on a Canadair Regional Jet with a capacity of 50 persons, Krejci said, adding that with Belavia, there will be 51 regular carriers offering its services at Prague airport.

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BANKING

Uzbek fund inks agreement with Czech exports bank

The Reconstruction and Development Fund of Uzbekistan has signed an agreement with the Czech Exports Bank aimed at the support and development and the investment and financial cooperation between the two countries, Pravda Vostoka newspaper reported. 
The new Czech partner of the Fund is a specialised state financial institution, which renders to Czech and foreign companies long-term financing with an aim to support the Czech exports, firstly the products of machine engineering, oil, electrical technology industry and transport and implementation of investment projects. The Reconstruction and Development Fund of Uzbekistan was established by the decree of the president of Uzbekistan in 2006.

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ENERGY

New NPP needed if long-run exports are to continue

Czech Industry and Trade Ministry's Electricity Department Director, Ladislav Pazdera, told Prague-based conference Energy Trading in Central and Eastern Europe on June 6th that the country has enough resources to be a regional exporter of electricity until 2015, after which supply and demand will balance out and the country will have to extend its nuclear power production capacities in order to sustain supply long-term, Interfax News Agency reported. 
"Extension of current nuclear capacities is not the question but when, whether it will be in 2020 or 2025," Pazdera was quoted as saying.
He said the timing will depend on whether or not companies can manage to overcome zoning limits banning them from exploiting 1,293 tonnes of untapped resources of brown coal. Prague- and Warsaw-listed Czech state-controlled power utility CEZ currently operates two nuclear plants Dukovany and Temelin. He also said that the Czech government is opposed to the idea of creating a single energy market regulator on the European Union level but would back a middle regulatory body. "We support the idea of giving more competence to some regulatory body but not giving regulatory powers to the European Union," Pazdera was quoted by Interfax as saying.

CEZ mulls participation in EU strategic ZEP

CEZ Press Officer, Ivo Mestanek, said that the company is interested in participating in the EU strategic zero emission platform (ZEP), which calls for construction of 10-12 demonstration power plants using Carbon Dioxide Capture and Geological Storage (CCS) technologies. "CEZ is currently analysing possibilities to participate in some pilot project in this sphere; for example, within the ZEP Platform," Mestanek was quoted by Interfax News Agency as saying.
He declined to specify how much money CEZ would be willing to invest into such a project, saying that this technology is still in a developmental phase and any price assessment would be "premature."
The EU is planning to test the technology across Europe by 2020 as a possible solution to the greenhouse gas emission problem. The Czech government would support the creation of a demonstration power plant with the ability to separate CO2 from other emitted gases and dump it into underground geological layers if the European Union finances the project, Czech Industry and Trade Ministry's Electricity Department Director, Ladislav Pazdera, was quoted as telling journalists on June 6th. "There is a decision to build such a demonstration plant in South Moravia, but we do not support this idea as a general solution for the CO2 issue," Pazdera was quoted as saying on the margins of Prague-based conference Energy Trading in Central and Eastern Europe.

CEZ to issue bonds worth 10bn crowns

The board of power utility CEZ recently decided on the plan to issue short- and medium-term bonds worth 10 billion crowns on the Czech market, Interfax News Agency reported. 
"This issue is designed to take advantage of the favourable conditions of the domestic market, for which it will be mainly meant," CEZ spokesman, Ladislav Kriz, was quoted as saying in a press release. He added that an effort to improve the company's capital structure through increasing debt is the main motive behind the planned bond issue. The board also decided to found a medium-term Eurobond programme - medium-term notes - in the volume of CEZ group's overall debt capacity of four billion Euro with the first tranche of the bonds being issued this fall. Both issues will be subject to approval by CEZ's supervisory board.

Unipetrol Q1 net profit reaches 1.56bn crowns

Petrochemicals firm Unipetrol CEO, Francois Vleugels, told a press conference on the morning of May 15th that it had increased its first quarter net profit to 1.564 billion crowns in 2007, despite a modest 1.9 per cent year-on-year (y/y) increase in sales to 20.6 billion crowns, Interfax News Agency reported. 
"There were several factors for the strong performance," Vleugels was quoted as saying, adding: "The overall volumes of all units increased (and petrochemical and refinery) margins were higher."
Prague-listed Unipetrol, controlled by Polish PKN Orlen, released its un-audited first quarter 2007 consolidated results before the market opened on May 15th, beating market expectations with earnings before interest and taxes (EBIT) at 2.3 billion crowns, up 137 per cent y/y, mainly on the back of the refinery segment, it was reported. 
"The result significantly beat the market estimate and our expectation (both 1.6 billion crowns)," Atlantik FT analyst Petr Novak was quoted as saying, adding: "As sales were nearly flat y/y and EBIT rose sharply, the EBIT margin grew by a strong 11.2 per cent (up 6.4 percentage points) and significantly beat our projection and market expectation (both 6.8 per cent)." According to Vleugels, Unipetrol's retail station unit Benzina also noted particularly strong diesel sales, nearly doubling its net profit.
"Benzina showed a 98 per cent y/y increase in net profit," Vleugels said. He also cited favourable macroeconomic conditions and unseasonably-warm weather as contributing to the strong results. Vleugels noted that two planned maintenance shutdowns at Unipetrol refineries, in September and October, would affect future quarterly results. Unipetrol is a group of companies operating in the petrochemical industry in the Czech Republic. In 2005, it became part of PKN Orlen.
Unipetrol primarily focuses on crude oil processing, fuel distribution and petrochemical production. It employs approximately 4,000 people. The company is traded on the Prague Stock Exchange (BCPP) blue-chip PX index. 

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FOREIGN INVESTMENT

US$147m investment by Taiwanese Foxconn

Foxconn recently confirmed at a press conference that it aims to invest US$147m into a new liquid crystal display (LCD) and PC components plant to be based in the Czech town of Kutna Hora, in Central Bohemia, Interfax News Agency reported. 
Foxconn is a Taiwanese electronics producer. The plant is expected to employ 5,000, the Czech News Agency CTK informed. Foxconn CZ's existing plant, built in the Czech town of Pardubice, East Bohemia in 2000, now employs more than 4,500 workers. Its 2005 profits reached some 509 million crowns on revenues of 51.4 billion crowns. Its clients include US computer giant Hewlett Packard and Japanese electronic goods maker Panasonic.

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MINERALS & METALS

Steel producer MSO to change image

Czech steel-producer Mittal Steel Ostrava (MSO) announced on June 5th that it will change its logo and introduce a new trademark in line with the whole group, Interfax News Agency reported. 
MSO is controlled by multinational giant Arcelor Mittal. "The name of the Ostrava-based company, Mittal Steel Ostrava will stay intact for now but its change is planned for," MSO spokeswoman Jana Dronskla said in a statement. MSO posted a 4.64-billion-crown net profit in 2005. In 2006, the company produced 3.06 million metric tonnes of steel and exported 59 percent of its production to 88 countries worldwide.

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TELECOMMUNICATIONS

Vodafone Czech Republic reaches 2.47m subscribers

Vodafone Czech Republic recently announced it had registered 62,000 new clients in the first quarter of 2007, bringing its total number of subscribers to 2.475 million, Interfax News Agency reported. 
The operator's spokesperson Jakub Hrabovsky said that some 53 per cent of Vodafone's clients pay monthly flat fees, with the remainder buying pre-paid cards. Vodafone's average revenue per user (ARPU) stood at 613 crowns per month at the end of the first quarter of 2007, Hrabovsky was cited by Interfax as saying. 
The company sees a potential to grow on the highly penetrated Czech market mainly through special offers for corporate clients and through services providing convergence between mobile and internet products, Czech CEO Graham Maher said in a press release. Vodafone is the country's No.3 mobile operator after the leading, Spanish-controlled Telefonica O2 Czech Republic, which has not yet published its first quarter figures. Germany's T-Mobile registered 5.109 million customers in the first quarter, including 1.9 million contract clients, it was reported.  

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