Czech news in brief for February 8: Thursday's top headlines

Around 70 Czech farmers in the Liberec region today protested for the second time this week against the Czech government and EU. The demand the state and EU ease farming restrictions. An agronomist representing the protesters delivered their demands to officials, ensuring they reach Minister of Agriculture Markov Výborný.

Protesters from various farms in the Liberec region gathered, focusing on addressing the critical situation in the European commodity market due to non-systemic imports and advocating for agricultural policy adjustments. The farmers seek support for agricultural production to ensure self-sufficiency and affordable food.

The Banking Council of the Czech National Bank (CNB) has announced a 0.5-percentage-point reduction in the country’s base interest rate, to 6.25 percent. The decision weakened the Czech crown by 24 haléř (pennies) to EUR 1: CZK 25.21 as of Thursday afternoon – the weakest level since May 2022. 

Analysts attribute the rate adjustment to the CNB's anticipation of weakening inflation, projecting a drop to 3 percent in January. The CNB also revised its GDP forecast downward to 0.6 percent for the year, citing persistent economic challenges. Despite expectations of declining market interest rates, CNB head Aleš Michl warned of persistent inflation risks. The CNB will reassess the interest rate in March.

The upper section of the cable car top of Sněžka Mountain aims to resume operations by the end of February, according to the mountain’s management, after technical difficulties. The section experienced a malfunction in one of its engines, while the lower section remains operational from Pec pod Sněžkou to the middle part of the route (Růžová hora). 

The Czech post office on top of Sněžka will face potential challenges with distribution during the prolonged outage. The faulty engine is being repaired in Vsetín, with hopes of securing a rental from the Italian manufacturer to expedite the process.

In January 2024, unemployment in the Czech Republic rose to around 4 percent – the highest it has been in almost three years, according to new data from the Labor Office. There were 295,546 job applicants and 266,783 vacancies. This is a 16,000-person increase in unemployed individuals and a decrease of 5,000 job openings compared to December. 

However, excluding the impact of the Covid-19 pandemic, this is the highest unemployment rate for January since 2017. Minister of Labor and Social Affairs Marian Jurečka reminded journalists today that the Czech Republic still has one of the lowest unemployment rates in the EU.

Czech Minister of Defense Jana Černochová expressed solidarity and support for Israel during her visit to the country today. She met with her Israeli counterpart, Joav Galant, to discuss security in the Middle East and Europe, defense cooperation, and acquisition projects. 

Černochová praised Israel's efforts to increase humanitarian aid to the Gaza Strip and condemned the actions of Hamas against Israeli civilians. She also mentioned the Czech Republic's recent aid for civilians in Gaza and Israeli health organizations. The Czech politician stressed the need to prevent the conflict from spreading to the wider region, citing attacks by militant group Houthi on commercial ships and Iranian-backed militia attacks on American troops as significant threats to Western security.

A recent poll by the STEM research agency has found that a majority of Czechs support stricter gun possession laws, but not a complete ban. This comes after a December attack at a university in Prague by a gunman who had a permit for eight weapons. The survey found that almost four-fifths of respondents want more frequent medical exams and psychological tests for gun owners, and over half want significant tightening of the laws.

However, most Czechs do not expect major changes to happen soon. The top changes supported by the majority include more frequent medical exams and limits on the number of guns and ammunition one person can possess

Transport Minister Martin Kupka said in a Wednesday press conference that the Czech government maintains its unwavering support for Israel and will not change its stance on the ongoing conflict in the Middle East. The government's position is based on the long-standing relations between the two countries.

In response to an open letter from 80 Czech public figures calling for a change in the government's attitude, Kupka clarified that while the government condemns the initial Hamas attack on civilians, it recognizes Israel's efforts to protect the civilian population and maintain peace in the region.

After a cabinet meeting on Wednesday afternoon, Health Minister Vlastimil Válek announced that he will temporarily list hexahydrocannabinol (HHC) and similar substances as addictive substances. The updated list will be presented at the next cabinet meeting, and the ban will take effect after approval from the European Commission, expected in about a month.

The hospitalization of around 100 children and young people after consuming HHC prompted the decision. These substances are known to be harmful and can affect brain functioning. Agricultural Minister Marek Výborný stated that a temporary ban is necessary, as many similar derivatives appear daily.

The Czech government has approved the proposal to add May 1 as an official “significant day” in the country every year, commemorating the country's accession to the EU in 2004. Martin Dvořák, the European Affairs Minister, submitted the proposal. Transport Minister Martin Kupka stated that this day holds great importance in the country's history, symbolizing its pro-Western stance after the Soviet era. 

Dvořák emphasized the benefits and opportunities brought by the EU membership and expressed the country's commitment to its European partners. May 1 is already a public holiday in Czechia due to Labor Day. The law will be introduced in 2025.

The Czech National Bank's Banking Council will hold its first meeting of the year to discuss interest rates. Analysts predict a continuation of the downward trend with a possible 0.5 percentage point cut in the key interest rate, which currently stands at 6.75 percent. Experts cite the declining inflation rate as a factor contributing to this decision. 

However, some central bank members may wait for the January inflation data before making a final decision. Overall, there is expected to be a thorough debate between a 0.25 and 0.5 percentage point cut, with a possibility of the latter being favored. Results will be announced this afternoon.

The Czech government has decided to allocate approximately CZK 1 billion annually to the European Peace Facility (EPF) from 2024 to 2027, to support military assistance to Ukraine. This contribution will be taken from the Defense Ministry's budget.

Originally, the EPF had a financial ceiling of EUR 5.69 billion (CZK 142 billion), with Czechia contributing 1.48 percent. However, after the Russian invasion of Ukraine, the ceiling was increased multiple times, reaching 12 billion euros. The Czech share of the EPF budget for this year has increased to 1.86 percent, resulting in an expected contribution of around EUR 24.3 million for the entire period.