Thursday News Briefing

NEWS

COALITION The Prague Civic Democrats (ODS) and TOP 09 have reached an agreement for a new coalition government at City Hall, the Czech News Agency (ČTK) reported. Mayor Bohuslav Svoboda will remain as mayor, quelling rumors to the contrary that have circulated around City Hall since the ODS pulled out of its yearlong grand coalition with the Social Democrats (ČSSD). It had been thought that Prague TOP 09 chief Zdeněk Tůma would likely replace Svoboda if an agreement was reached, but TOP 09 was willing to concede the mayoral post if the party received a majority on the city council. Tůma could possibly become head of the council's finance committee, according to the daily Právo. Though ODS officials have claimed the split with the ČSSD was over fiscal policy differences, insiders say Prague ODS was giving in to the party's national leaders who were against the coalition between ODS and its biggest rival since the agreement was made in 2010.

UNIVERSITY The number of Czechs who have received a university education has doubled in the past 15 years, according to numbers released by the Czech Statistical Office (ČSU) Nov. 23. From 1995 to 2010, the number of citizens going to college jumped from 662,300 to 1,240,000. The age bracket with the largest increase was the age 25-29 category, which saw the number of people either working on a degree or having completed a degree triple from 2003 to 2010, alone. "It's a really radical increase if we realize that it happened within a mere seven years," said Ondrej Nyvlt of the ČSU.

KLAUS In President Václav Klaus' new book, European Integration Without Illusions, explores familiar territory as the noted euroskeptic takes the EU to task for overreaching and promoting integration that he says has diminished the sovereignty of its member states and is one of the key factors in the current debt crisis that is threatening the euro. He says the EU has found itself in a "blind alley" in which the problems are many but the options to get out are few. He told journalists at Prague Castle Nov. 23 that the EU is in an "intermediate stage" from which it can either head into a deeper fiscal and political union and risk destroying individual member states, or throw away its quest for integration that would essentially mean the past 10 years "have been lost." He conceded that the Czech Republic has no choice than to be a part of the EU.

BUSINESS

VENTURE CAPITAL The government approved a 500 million Kč venture capital fund aimed at providing funding for small and midsize businesses, ČTK reported Nov. 21. Startups have almost no access to venture capital in the Czech Republic, Industry and Trade Ministry representatives said, leading to a lot of innovative ideas ending up just on paper. Under the plan for the fund, fledgling companies must also find a private investor willing to put in a 30 percent investment in order to get the government support. The firms operating in the biotechnology, nanotechnology, robotics, life sciences and information technology areas may be eligible for the support, said Industry and Trade Ministry spokesman Pavel Vlček.

CROWN The Czech crown retreated significantly against both the euro and the dollar Nov. 23 compared to the previous day's close, losing 18 hellers versus the euro to close at 25.69 Kč and 31 hellers versus the dollar to close at 19.23 Kč according to Patria Online, ČTK reported. Analysts say the slumps are a result of a lack of stimulus in the domestic market and the resulting tendency to react to the worsening sentiment in the world. "There is no news from home in the backdrop. The state of the Czech economy is not that bad. It is the situation of Europe that's bad," said Vladimir Pikora, chief economist of company Next Finance.

BANKS The Austrian central bank has imposed a 1:1 loan to capital ratio on new lending banks through their subsidiaries, which may have a negative impact on lending activity in the Czech Republic, daily Hospodářské noviny reported. Raiffeisenbank and UniCredit, which according to the daily have been funding their lending expansion with money from the Austrian parent banks, may face complications next year.

WEATHER

Prague; Czech Republic; Partly cloudy; High: 4 C; Low: -1 C

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