Czech Republic

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.

EU finance ministers on Tuesday urged coordinated action to tackle the economic crisis, against a backdrop of increasing criticism over French "protectionist" moves in its auto sector, Agence France-Presse reported. With Europe in a growing recession the ministers agreed to work together on ways to deal with their banks' "toxic assets" which are hampering lending. They also looked at the progress of a €200 billion ($260 billion) stimulus package designed to kick start their ailing economies. Overall the cry went out to avoid the temptation of protectionism at all costs.

Russia's gas price dispute with Ukraine escalated Tuesday, disrupting deliveries to the European Union in the midst of a bitter cold spell, with a number of countries reporting that gas supplies had been suspended or reduced, and Germany predicting a possible shortage, the International Herald Tribune reported. Bulgaria, Romania, Croatia, Macedonia, Turkey, Greece, the Czech Republic and Austria reported that gas supplies had been suspended or reduced after Gazprom, the Russian gas monopoly, reduced gas shipments through Ukraine.