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Spotlight Issue

Politics: Six months in the office for the Czech government

11 August 2014

Czech government after its meeting on 8th August published review of its planned and carried out measures and actions within government priorities framework. Among other things Ministry of Finance cancelled the act that introduced so called Single Collection Point, introduced stricter rules on self-employed persons’ expense allowances and limited them generally with the sales revenue of 2 million CZK. Czech Republic is also to have three tax rates as Government introduces lower rate for medicine, books, baby diapers and irreplaceable baby food along with repealing the law aiming to unite the two former tax rates into single one. As promised the Government also approved Rules on Co-financing of European Structural and Investment Funds in the Programme Period of 2014-2020.

For the full report from all areas click here.


Politics: EU states free to supply weapons to the Kurds

15 August 2014

On 15 August, foreign ministers of the EU28 met in Brussels at an extraordinary session of the Foreign Affairs Council. The meeting on ministerial level followed the special meeting of the Political and Security Committee of the Council earlier last week. The main issue debated was the situation in Iraq, where armed militias of the Islamic State gain ever more territory and commit ever more atrocities, mainly in the northern – Kurdish part of Iraq. Thousands of people fled their homes in Iraqi Kurdistan, which has created an extreme humanitarian situation. To stop the advances of the well-funded and organized islamists, the US have commenced air strikes on their positions. As the Iraqi central government and army are unable to stop the islamists´ progress, it is mainly the autonomous Kurdish militia that fights the Islamic State and protects the local indigenous communities. In this situation the Kurds call for help, mainly in military terms. The EU28 foreign ministers have agreed, that Member States that are willing to supply the Kurdish militia with weapons and military materiel are free to do so, in accordance with their laws and provided that Iraq accepts such help. A coordinated EU action will, however, not take place. France was among those who pushed hard for EU military aid, together with Germany, the Netherlands, Italy and the Czech Republic.



Politics: Ukraine may halt transit of Russian energy through the country

14 August 2014

Ukraine's parliament adopted law enabling more than 20 sanctions to be applied against Russia, including a halt to energy transit through the country.  The sanction options include blocking and freezing assets, a ban on business activity in Ukraine, barring participation in privatizations, halting the use of licenses and all transit through its territory. Special economic measures also involve a ban on financial transactions, as well as a ban on entry and movement across the country. However, the law doesn´t mean that the sanctions will be immediately applied. According to the law, sanctions must be approved by the National Security Council and are introduced by presidential decree. The law was approved by the majority, 244, members of the parliament. For more, click here.


Economic Policy: EU-Canada free trade deal finalized

08 August 2014

Insiders have reported that talks on the EU-Canada free trade agreement were finalized on 5 August. The talks started in 2009 and political agreement on key issues was reached in October 2013. Now the text of the deal should be ready for final legal review and translation into the 23 EU official languages. The agreement is to cut 98% of the existing tariffs and duties and is expected to boost EU-Canada trade and lead to increased economic growth and jobs creation. Moreover, it is seen by the experts as a test case for the TTIP, a huge economic deal that would create world´s largest free trade area. In the past weeks, reports were published that Germany threatens to stop the deal´s ratification if issues concerning investor-to-state dispute settlement were not resolved. Germany was said to fear a too strong mechanism for private investors, which could eventually, through third-party arbitration, lead to softening certain environmental and consumer protection rules in the EU. A Canadian source stated, however, that this issue existed, but had been solved a long time ago.



Politics: Impact of Russian sanctions on the Czech economy

08 August 2014

In reaction to EU and USA introducing further sanctions on Wednesday 6th August the Russian president Vladimir Putin signed decree banning or restricting import of agricultural production from the countries that adopted sanctions against Russia. The decree is to be valid for a year. This ban will affect predominantly export of fruit and vegetables to Russia. Czech companies already urged government to react as they would lose hundreds of millions because of these sanctions. Czech Prime Minister Bohuslav Sobotka already called meeting of responsible ministers and announced that the government is preparing workgroup addressing possible impact of Russian sanctions on the Czech Economy. The aim of the workgroup should be to monitor and assess the impact of Russian sanctions and prepare materials for the government’s decision-making. According to the estimate of Czech Minister of Industry and Commerce Jan Mládek preceding the introduction of decree by Russian president Putin the impact of EU sanctions on the Czech economy should have been around 2.2 bn CZK with another 300 million CZK from Russian reciprocal sanctions. The sanctions also threaten existence of around 800 workplaces dependent on respective industries. However, the numbers are not by far complete as the full scale of newly adopted Russian sanctions along with Russian ban on import of industrial goods remains to be seen in the future. Minister of Agriculture Marian Jurečka already called for meeting of EU ministers to address the problem. He also urged the people to eat more Czech food.



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