News in brief for May 15: President Pavel attends Copenhagen summit, calls for world unity

Czech Prime Minister Petr Fiala tweeted this afternoon that European Investment Bank (EIB) President Werner Hoyer commended the Czech government for its efforts to strengthen public finances via its new austerity package. According to Hoyer, the state showed “courage” through its fiscal reform, which was announced last week. 

While not providing details of their meeting, Fiala mentioned that they discussed several significant matters. The EIB states that its focus in Czechia remains on investment in rail transport development – particularly the implementation of the European Train Control System.

An explosion and resultant fire this afternoon in the city of Hradec Králové has destroyed a store on the ground floor of a building and injured two people, who needed to be transported to hospital due to serious burns. The incident occurred near the center of the city.

Rescuers also evacuated eight others from the building. The cause of the explosion has not yet been established, but a gas explosion has been ruled out.

Governor of the Czech National Bank Aleš Michl told journalists today that inflation in Czechia should fall below 10 percent within three months. It has been above 10 percent consistently for over a year – it spiked following the beginning of the widescale Russia-Ukraine war.

Recent months have seen the inflation rate decline slightly. It currently stands at 12.7 percent. Michl also confirmed that interest rates will continue to remain high in the coming months, even if it stops being in double digits.

Czech President Petr Pavel, speaking at the Copenhagen Summit for Democracy today, emphasized the need for unity among democratic nations to counter the threats posed by China and Russia. He expressed concern that China, in the long term, presents a greater danger to countries upholding democratic values and human rights than Russia. 

Pavel also warned that if Russia gains control over Ukraine, it will likely seek further expansion. He stressed the importance of Ukraine in containing Russia's imperialistic ambitions and advocated for its integration into the EU and NATO, as it shares the values of free countries.

A report from the Czech National Monitoring Center for Drugs and Addictions has found that almost 10 percent of all adults in Czechia – about 900,000 – drink alcohol “every day”. It was also found that the average resident of Czechia consumes about 10 liters of pure alcohol per year. 

According to the report, 1.5 to 1.7 million people in Czechia drink at risky levels. According to the research center, about five dozen people die from alcohol overdose every year. Another 6,000 to 7,000 deaths are associated with alcohol misuse. 

Czech Foreign Minister Jan Lipavský has criticized Hungarian Prime Minister Viktor Orbán's comparison of EU integration with the motives of Nazi leader Adolf Hitler. On Friday, Orbán said that even Hitler had believed in the notion of a united Europe and spoke of an “ever closer union.”

“No one is forcing Hungarians to be part of this community if they feel this uncomfortable,” said Lipavský in response. EU Commissioner Vra Jourová also remarked that Hungarians stay away from her in Brussels because they fear "persecution at home,” Euractiv reports.

Trade unions in Czecha have this afternoon declared a strike alert due to the Czech government’s austerity package, according to chairman of the Bohemian-Moravian Confederation of Trade Unions Josef Středula, Czechia’s main and largest trade union group. 

This means that, unless some demands are met, several industries may organize a widescale strike. This is the first time that such an alert has been made in 10 years. Union members have expressed concerns about lower sums for wages, price increases after value-added tax (VAT) adjustments, the introduction of sickness insurance payments, and the raising of the retirement age.

Many residents in Prague 8, 9, and 18 were without access to running water on Monday morning due to the breaking down of the water-supply line during maintenance works. About 53,000 people who live in the districts of Letňany, Kobylisy, Libeň, Střížkov, Prosek, Vysočany, and Ďáblice, are at risk of being affected by the issue.

Engineers are currently fixing the problem, which is estimated to be resolved at around 5 p.m. Some kindergartens in the area have limited operations or have closed completely due to the incident. 

The Czech government's austerity package proposes a slower rise in the pay of constitutional officials, including ministers, lawmakers, judges, and prosecutors, as their salaries will be calculated based on a 6 percent reduced calculation base. This is expected to save CZK 400 million with the government justifying the decision on the grounds of solidarity with the real decline in wages in the economy.

The government also plans to raise corporate income tax, an excise tax on tobacco and alcohol, and gambling and property taxes. It will re-introduce sickness insurance for employees and raise social insurance payments for sole traders and the self-employed.

Czech European Commission Vice-President Vera Jourova has warned that the Czech government's proposed increase in VAT rates from 10 to 21 percent for newspapers could be devastating, especially for regional and local titles. Jourova said that the shift of advertising to the digital space had already caused printed media to struggle, and the new basic rate for newspapers puts the Czech Republic "at the top of the European ranking".

In contrast, Prime Minister Petr Fiala believes that a higher VAT on daily papers will not threaten their publishing, saying that people can get information via internet sources and public media.

The Czech hockey team won their second match at the World Championship against Kazakhstan with a score of 5-1. The team remains in third place in Group B, behind Switzerland and Canada. The Czech team took a 2-0 lead in the opening half, and although Kazakhstan scored a goal, the Czechs responded with three more goals.

Filip Chytil was forced to withdraw from the game due to a facial injury. The Czechs outshot their opponents 17:4 in the opening act and scored their first hit of this year's work in the national team.

Mortgage loans provided by banks and building societies in the Czech Republic fell by 16 percent in April compared to March, according to statistics from the Czech Banking Association Hypomonitor. Although both the volume and number of mortgages remain high compared to the middle of last year when the market began to slow, the figures indicate a subdued market compared to the past.

The interest rate for new mortgages without refinancing also rose from 5.86 percent in March to 5.89 percent in April, returning to the levels seen in February and October of last year. Despite this, the market is said to be recovering slightly in recent months compared to H2 2022.

A draft national plan for addressing HIV/AIDS in the Czech Republic from 2023-2027 aims to increase awareness of HIV occurrence and identify 95 percent of those infected, up from the current estimate of 83 percent. There are around 620 people who are unaware of their HIV infection in the country, with about 350 of them being foreigners.

The plan also notes that in recent years, foreigners accounted for over 40 percent of new HIV cases, with the majority getting infected in their country of origin. The availability of condoms and single-use needles and syringes should be increased, according to the proposal.