Wednesday News Briefing

NEWS

MINISTER Martin Kuba, vice governor of south Bohemia, was selected by Prime Minister Petr Nečas (Civic Democrats, ODS) to become the next industry and trade minister, the daily Hospodařské noviny reported. Kuba (ODS) replaces Martin Kocourek (also ODS), who resigned Nov. 9 after questions were raised about how 16 million Kč ended up in an investment account held by his mother in 2008. The prime minister and Kuba have had a rough history within the ODS as Nečas reportedly did not accept Kuba as vice chairman of the party's south Bohemia region in 2010, claiming he was one of the party's "godfathers." Media speculation following Kuba's appointment to Nečas' Cabinet suggests the prime minister was looking for a powerful ally within his government. President Václav Klaus is expected to swear Kuba in today.

DRUGS Marijuana is the most prevalent illegal drug in the Czech Republic, according to a survey released Nov. 15 by the National Drugs and Drug Addiction Monitoring Center. The news is a somewhat welcome change for anti-drug officials who within the past two years have been combating a larger problem with new, synthetic drugs smuggled in from Poland. The overall number of problem drug users increased in 2010 according to the survey. The Czech Republic spends about 400 Kč on drug addiction prevention and treatment each year.

FOOD The quality of food products in the Czech Republic is markedly lower than that in West European countries, the daily Hospodařské noviny reported. According to a study conducted by the paper - which compared many basic food products such as jams, sausages and ketchup found in groceries in the Czech Republic and other East European countries with those same products in Austria and Germany - the "Eastern products often contain cheap substitutes and waste instead of genuine foodstuffs." Despite the difference in quality, many of the products are equal in price or in some cases more expensive than their counterparts in German and Austrian stores.

BUSINESS

GROWTH The economy grew 1.5 percent year-on-year in the third quarter of 2011, according to data released by the Czech Statistical Office Nov. 15. Quarter-on-quarter GDP confirmed the trend of a gradual slowdown of the growth in economic performance, statisticians said. The gradual fall in domestic demand was again compensated by positive development in external trade, which remains the only increasing component of GDP despite a weakening of foreign demand, the office said. "No details are known yet, but we can expect that the economy is pulled only by foreign trade, while domestic demand continues to fall," Petr Dufek, an analyst with ČSOB told ČTK.

BANKS The four largest banks in the country saw profits down 15 percent at the end of September. The aggregate net profit of the banks fell to 26.28 billion Kč, ČTK reported. Net earnings at ČSOB, Komerční banka and UniCredit Bank decreased in the period owing to write-offs of Greek bonds. In contrast, Česká spořitelna raised its net profit. "However, nothing has changed in the fact that Czech banks maintain a high capital cushion and sufficient liquidity, thanks to which they are assessed as much more stable than most West European banks by investors," Marek Hatlapatka, an analyst with Cyrrus, told ČTK.

SLOVAKIA Slovak refinery and petrochemical group Slovnaft, a part of Hungarian group MOL, showed a net profit worth 25 million euros in the first three quarters of this year, down by 1 million euros year on year, ČTK reported. In the third quarter alone, the company sustained a loss of 30 million euros, mainly due to a rise of oil prices and lower margin of petrochemical products. The ongoing debt problems of advanced countries are strongly affecting consumer sentiment, which has a negative impact on the firm's business results, Slovnaft CEO Oszkar Vilagi said.

  WEATHER

Prague, Czech Republic; Partly cloudy; High: 2 C, Low: -1 C   

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