Czech News Daily

Czech Airlines (CSA) employs 460 pilots at present, down 70 from the year before. Yet, 40 more pilots will have to leave by the end of 2010 and a similar number in the next two years in connection with the reduction of CSA’s fleet. The information comes from a rescue plan that is supposed to avert the danger of bankruptcy from CSA. The rescue plan also includes restriction of the number of lines only to the most lucrative ones. CSA’s 2009 loss reached the astronomic amount of CZK 3.7 bln, being ten times higher than planned originally. Source Pravo 15

The pension reform supported by a majority of a pension expert commission would entail so-called transformation costs caused by the obligatory three-percent redirection of a part of the insurance premiums from the public system to individual savings. Vladimir Bezdek, the head of the commission, says that the transformation costs will fully disappear in about 60 years. He estimates the costs at approximately CZK 30 bln yearly on average in the first fifteen years. The transformation costs are supposed to cease to exist in the moment when only people, to whom the redirection of a part of insurance premiums applied, will receive pensions.  Pravo 14

Czech companies have the certainty that they will not face an income tax increase in the next four years. The reason is that after the first coalition negotiations about the budget, the VV (Public Affairs) abandoned its proposal to raise the corporate tax from today’s 19 % to 20 %, which had been a part of its election platform. The party says that if they are able to gain money to reduce the budget deficit from other sources, they will not raise the tax. As the ODS (Civic Democrats) and the TOP 09 (Tradition, Responsibility, Prosperity) also keep unambiguously rejecting growth of corporate taxes, there is no power in the Chamber of Deputies now that would increase these taxes in the next four years.  Source HN 1

The Fortuna betting company, which belongs to the Penta group, enters the Austrian and Hungarian market. It will offer Internet bets in these countries under the FortunaWin.com brand through a Malta based subsidiary company. Online betting is the segment, in which Fortuna has registered the most significant growths in the recent years. Besides the Czech Republic, Fortuna operates also in Poland, Slovakia and Croatia.  HN 18

The ODS (Civic Democrats) has admitted, for the very first time after the elections, that it will very probably have to increase taxes. The reasons include the poor budget situation and the promised pension reform, for which the emerging government will need new resources. Petr Necas, the likely future prime minister, will support the proposals of the Bezdek pension commission. It plans a transfer of several tens of billions of crowns yearly from the state pension system to private accounts, at which everyone will save money for him or herself. The TOP 09 (Tradition, Responsibility, Prosperity) agrees with the proposal of the Bezdek commission as well.  Source HN 1

The three parties that negotiate on the government have agreed upon introduction of tuition at universities. The tuition will most likely be paid for the first time in the school year 2013/2014, even though the TOP 09 (Tradition, Responsibility, Prosperity) and the VV (Public Affairs) would like to introduce it sooner. The parties have not reached an agreement yet on whether the tuition would be paid during the studies (TOP 09) or after the student graduates (ODS, VV). The maximum sum of CZK 10,000 per semester is being mentioned. The system of student loans, approved by the cabinet of PM Jan Fischer, will start even before the introduction of the tuition. Each student will thus have an opportunity to borrow up to CZK 54,000 yearly.  Source Mfd 1

At the end of 2010, the economic crisis will fully hit also the Czech health care, which has been resisting it for two years. Its impact will probably be very hard, because VZP and some smaller insurance companies will run out of the multi-billion surpluses they saved during the previous three years. Unless something changes, they will start to get into debts due to the high costs of health care and lower insurance premium collection. What it means for patients is that health care restrictions, similar to those in 2005 and 2006, may apply as soon as in spring 2011.  Source HN 1

The state-owned Czech Railways, the owner of the CD Cargo company, has sent KPMG auditors for an extraordinary inspection into the company. The objective is to find out whether CD Cargo, one of the biggest freight carriers in Europe, carries out its business in an efficient way. The reason is that CD Cargo has reported a high loss of CZK 378 mln, instead of profits. The first inspection in CD Cargo started in 2009 after the regular auditors expressed objections to a part of the company’s accounting. However, Oldrich Vojir, the head of the supervisory board of CD Cargo, said that it was non-standard for a parent company to carry out an audit in its subsidiary company. A change in the statutes therefore followed, which made the current inspection legally correct.  Source MFD 6

President Vaclav Klaus vetoed a bill on the Czech National Bank, which was supposed to define the central bank’s operation after the Czech Republic’s accession to the euro area. The Czech Republic has not fixed any date of adoption of the euro yet. As the current Chamber of Deputies cannot overrule Mr Klaus, the bill thus ends its legislation process. The bill represented mandatory transposition of the European Union’s law into the Czech legal order. The President noted that if the bill came into force, two valid laws on the Czech National Bank would exist in parallel.  Source  LN 14

Financier Zdenek Bakala has announced that he donated the total of CZK 28.5 mln to the ODS (Civic Democrats), the TOP 09 (Tradition, Responsibility, Prosperity) and the VV (Public Affairs) before the elections. He decided to support the parties because they offered responsible politicians with a reform programme before the elections. The man, who was listed among the richest men of the world by the US magazine Forbes, donated CZK 15 mln to the ODS, CZK 7.5 mln to the TOP 09 and CZK 6 mln to the VV.  Source LN 1