Czech lottery firm Sazka AS has asked its bondholders to agree to a 30% to 33% reduction in principal on outstanding bonds and to lowering the yield on the bonds to 6% from 9% to enable the company to continue operating and not move into bankruptcy, newspaper Hospodarske Noviny reported. Sazka hasn't disclosed the names of the bondholders, who together hold EUR215 million worth of bonds, the paper reported. Local financial institutions have declined to comment on the topic.

A major creditor filed on Monday an insolvency claim against the dominant Czech lottery firm Sazka, a court said, raising the stakes in a battle for control of the indebted firm, Reuters reported. A company controlled by real estate investor Radovan Vitek filed the claim with Prague City Court after he said Sazka failed to make timely payment on 820 million crowns ($44.78 million) of its debt he had acquired from banks.

Cuts to the Czech fiscal budget are welcomed by investors, and rating agencies have raised the country’s outlook as the newly-elected government follows its promises of fiscal austerity with actions, The Wall Street Journal New Europe blog reported. But the country’s national police and firefighters oppose 10% cuts to pay and steeper cuts to expenditure for investment and operations, and on Wednesday they announced plans for mass demonstrations on September 21 in Prague.

The Czech government Monday decided to cancel the sale of flag carrier CSA Czech Airlines to a Czech-Icelandic consortium, citing a range of concerns, and will instead continue restructuring the company, Dow Jones reported. The airline's pilots last week agreed to a 30% pay cut in return for the resignation of carrier's management team. The airline's new boss is the head of the Prague airport.

One of the first fallouts, and certainly the largest, from the financial crisis in the Czech Republic came Sept. 22, 2008, when glassmaking group Bohemia Crystalex and Porcela Plus entered bankruptcy proceedings. One year later, Crystalex, one part of the group, has a new owner and - if full scale production resumes - could become the first example of an unlikely survivor of the crisis, The Prague Post reported. Crystalex's resurrection depends mostly on the company's ability to reacquire orders with customers who may now be skeptical about reinvesting in a cracked corporation.

Slovakia-based low-cost airline SkyEurope Holding AG, which was struggling to restructure its debts, has filed for bankruptcy, according to an announcement on the Vienna bourse Web site on Tuesday, Reuters reported. The airline, which had started its operations in 2001 and flew its first passenger in February 2002, obtained a three-month creditor protection in Slovakia in June and was since trying to restructure and pay its outstanding debt.

Bratislava Airport reported that all its past due claims against Slovak low-cost airline SkyEurope Airlines, unpaid on June 22, have been submitted to the court supervising the airline’s restructuring process, The Slovak Spectator reported. On June 22, the Bratislava-based airline was granted protection from creditors, the SITA newswire wrote. Airport spokeswoman Dana Madunická informed SITA that SkyEurope has been settling its obligations within the regime of protection against creditors.

Strains in pensions systems, in both private and public provision, threaten to turn the financial crisis of the past two years into a social crisis lasting for decades, the Organisation for Economic Co-operation and Development warned on Tuesday. In its annual analysis of the health of pensions systems globally, the Paris-based organisation found private pension plans lost 23 per cent of their value last year, while higher unemployment “leaves little room for more generous public pensions”, the Financial Times reported.

The International Monetary Fund has corrected an embarrassing error that led to the publication of exaggerated estimates of the external debt levels of crisis-hit eastern European states, the Financial Times reported. In its latest Global Financial Stability Report, published in April, the IMF provided key numbers on 38 selected emerging market countries, including their 2009 external debt refinancing needs as a ratio of their foreign exchange reserves.

The European Union's emergency summit on March 2 to discuss growing protectionism is a make-or-break moment for the 27-nation bloc. At stake is its greatest achievement -- the single market for goods, people and capital. A row over France's latest car-industry bailout plan threatens to drive a wedge between member states. How the EU responds will have consequences not just for the EU but for global free trade. Unfortunately, the omens don't look promising. On the face of it, the French plans look like a clear case of state aid--illegal under EU rules.