"I cannot imagine that we would shut down nuclear power plants. That would lead to economic problems on the verge of an economic disaster in our country. We will certainly not do this," Necas said.

An entire number of other developed countries, such as France, are not at all considering reducing nuclear energy production, he added.

Germany has decided to shut down its seven oldest reactors built before 1980. The shutdown should last three months during which the German government wants to check the safety of all the 17 nuclear power plants in the country.

Environment ministers of the affected German states have agreed that Germany must hold talks about the safety of nuclear power plants also with the authorities of the neighbouring Czech Republic and France.

EU energy ministers agreed at an extraordinary meeting on Tuesday that nuclear power plants in the EU would probably go through stress tests. But the form of the tests and the time when they will be carried out will be discussed at the next meetings.

Czech President Vaclav Klaus and his Slovenian counterpart Danilo Tuerk today warned against populism and spreading of panics in relation to the ideas to limit nuclear energy production in Europe.

The situation in Japan, where several nuclear reactors tackle very serious problems following an earthquake and a devastating tsunami wave, is absolutely exceptional, Klaus and Tuerk said.

The situation should prompt an expert debate about strengthening the safety of nuclear power plants but not populist political decisions, they said.

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The economic ministers agreed on VAT unification owing to the pension reform on Thursday.

According to the Finance Ministry, higher VAT will lead to a growth in annual inflation by 3 percentage points.

The unions´ calculations put the inflation rate 4 percentage points above the set target, and in the case of the pensioners´ basket it could be even 1 percentage point more, said Zavadil.

Overall inflation rate could reach over 6 percent in the Czech Republic after the introduction of the unified VAT rate.

Analysts polled by CTK on Friday said the VAT change would increase inflation by 2 percentage points. Unification of VAT rates would raise spending by Kc250-Kc300 per capita and month.

In the case of pensioners, who spend money mainly on housing and food, the impact of the VAT unification would be even stronger, economists said.

According to an analysis of the Institute for Democracy and Economic Analysis (IDEA) at the CERGE-EI centre, the planed VAT hike will raise the cost of living of an average household by Kc425 a month.

The lowered 10-percent VAT rate should only apply to a strictly defined group of food, including bread, milk, potatoes, raw vegetables, unprocessed fish, baby milk formula, and food for patients with diabetes and other metabolic problems.

Medicines, accommodation services, water, books, public transport, culture and social care will be more expensive.

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The Rolls-Royce Ghost follows classic Rolls-Royce design features and is one of the most sought-after of the brand's models in Europe.

The global economic crisis may have led to the wane of luxury spending, but car manufacturers and local luxury vehicle importers report a stable market for luxury cars in the Czech Republic and even anticipate growth in the years to come.

"The demand is basically the same as before," said Jaroslav Vítek, spokesman for Czech luxury car importer Impex Car. "It dropped a bit last year, but the situation is basically the same here: Those who had money for luxury cars still have it."

Vítek cites Ferrari, Bentley, Mercedes, Rolls-Royce, Audi, BMW and Porsche among the most popular luxury imports.

Frank Tiemann, spokesman for Rolls-Royce, says the British brand has experienced growth across Europe so far this year.

"We are experiencing very positive sales development this year, with sales doubling in Europe in the first five months of 2010, in comparison with the same period last year," he said.

Tiemann attributes the increased sales to the popularity of the Ghost and Phantom Drophead Coupé models, and Vítek agrees that the Drophead has been one of the best-sellers for Rolls-Royce in the Czech Republic this year. Marketed as a freer interpretation of the classic Rolls-Royce, the Drophead is designed with lines and textures reminiscent of 1930s aesthetics and was inspired by racing yachts of that era. The engineering of the Drophead left nothing to chance, with a hand-welded aluminum super frame specially tailored for top-down driving that makes for a smoother ride in the convertible. The Ghost, on the other hand, is less stylized in its design, sticking to the classic Rolls-Royce features like a 2:1 ratio of the height of the wheel base to the height of the body, and a long wheel base and hood.

"If you compare Ghost and Phantom with a wardrobe, the Phantom is like a tuxedo, the car for very special occasions, while the Ghost is like a tailor-made business suit, the car for many special occasions," Tiemann said.

The second gem of the English motoring tradition, Bentley, also has a new flagship model doing well in European markets. The four-door limousine Bentley Mulsanne likewise took design inspiration from classic Bentley cars from the 1930s and '50s, with flowing lines and carefully brazed panels that give the exterior a seamless look. In terms of its added features, the Bentley Mulsanne infotainment and technology system is probably the most impressive. A 60-gigabyte hard drive allows for the storage of thousands of songs and pictures, and 14 speakers powered through six channels provide digital sound processing and full iPod and MP3-player capability.

"As a combination of power and performance on the one hand, and craftsmanship on the other, we feel Mulsanne has a unique position in the high luxury segment," said Annette Koch, spokeswoman for Bentley.

While all car manufacturers will say they don't skimp on interior or engine design, German luxury cars like BMW and Audi have always been at the vanguard of auto engineering.

"All vehicles bearing the four rings of the Audi badge embody the principles of Vorsprung durch Technik, meaning 'progress through technology.' Every component and fiber is carefully designed, constructed and tested according to these principles," said Jan Klíma, spokesman for Audi Czech Republic.

As for Czech consumers, Vítek says the Audi A6 is the most popular of the brand's models sold locally. Widely reviewed as one of the humbler luxury sedans of 2010, the A6 is still nothing to overlook. It features all-wheel drive, good fuel economy, a supercharged V6 engine and an exquisitely finished interior.

Klíma adds that Audis featuring the latest common rail injection technology are as notable for their power and refinement as they are for their exceptional fuel economy.

The economic value of such high-quality design and craftsmanship can't be overstated, since luxury car sales have remained strong throughout the crisis. At a loss to explain the phenomenon, Tiemann estimates that luxury car buyers probably view their purchase as a wise investment in a time of uncertainty.

"In 2009, we had heterogeneous development around the globe, and Europe was stable with exactly the same sales figures for 2009 as in 2008, which was a record year for sales," he said. "It might have been the right time for some people to invest in things with lasting value."

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The coalition government may be considering a unified value-added tax (VAT) rate of 20 percent, up from the previous agreement of a unified 19 percent rate, according to the daily Lidové noviny (LN), as the government figures out how it will finance upcoming pension reform.

The biggest impact of a unified rate would be an immediate rise in food prices, which could dampen household spending and even slow GDP growth, analysts say.

Politicians remain divided on whether certain services will remain at a lower rate, items considered essential like food and pharmaceuticals, or whether social payments to poorer individuals and pensioners would be augmented to offset the higher tax rate. Finance Minister Miroslav Kalousek believes the latter option would be less expensive for the state. According to a statement he made to the daily Právo Feb. 14, the minister expects consumer prices to rise by percent.

"The state would offset the cost-of-living increase for the needy," he told the newspaper. "It would be much less expensive for everyone than if certain items remained at a reduced rate."

The Public Affairs party has indicated it is willing to compromise on a unified VAT rate, after initially having rejected the idea outright. More recently, party members have said they will insist on maintaining a lower rate for basic foodstuffs like bread, butter, fish and vegetables.

LN has been the sole outlet to report the possibility of a 20 percent rate, citing an anonymous source Feb. 14. As the VAT stands now, the lower rate is 10 percent for essential services and goods, the higher rate 20 percent. The coalition's original agreement would have lowered the upper rate and raised the lower one to 19 percent. With this new possibility, two categories would be exempted from the higher rate: heat and medications. Food will thus be taxed at the higher rate, which could have a significant impact on household spending.

Items that are currently taxed at the lower rate that would become more expensive include diapers, textbooks, train and bus tickets, concerts, sports games and, in a dramatic list compiled by the news site Novinky.cz, funerals, condoms and wheelchair repairs.

For items and services required by the disabled, Kalousek responded that government subsidy programs exist and would be augmented to offset higher taxes.

The state expects to gain an additional 50 billion to 60 billion Kč in annual revenues from the VAT rate change, which is expected to go into effect Jan. 1, 2012. The Cabinet expects to reach an agreement on pension reform by the end of February.

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The form of the protest is simple - the doctors announced they are quitting their jobs in order to work in countries with more "doctor-friendly" health care sectors, most notably Germany, which is generally seen as a sort of promised land by Czech job-seekers.

According to the Czech medical chamber, 3,831 doctors gave notice by January 1, 2010. However, they can change their mind before the end of February - in that case, most of the hospitals in question would accept them back. Spokespersons of Thomayer and Na Bulovce hospitals in Prague confirmed this to Aktualne.cz. In Motol, other Prague hospital, some of the doctors have already withdrawn their resignations.

The initiative's web page (in Czech) cites the long-term underfinancing of the Czech health care sector as the main reason of the action. While the Czech Republic's spending on health care system equals roughly 7 percent of its GDP, the EU average is 10 percent, says the web page.

According to the unions, the "exodus" initiative affects 78 out of the Czech Republic's 200 or so hospitals. There are approximately 16,000 hospital doctors working in the Czech Republic, which means that nearly one in four appears ready to leave.

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In spite of that, the 2010 budget was "only" CZK 156 bil (EUR 6.2 bil).

Where does the difference came from? Most of it, from EU funds - which effectively means from richer EU member states.

Czech Finance Ministry said this in its report on the 2010 budget.

The reports shows that the Czech Republic received in 2010 more money from from EU funds than in the previous year, which was the most significant force that helped the struggling Czech budget in the year of the European sovereign debt crisis.

In 2010, the Czech Republic got CZK 37 bil (EUR 1.5 bil) more from the EU funds in comparison with 2009, when the deficit was CZK 192 bil.

In addition, it managed to collect CZK 11.2 bil more in VAT, CZK 7.9 bil in social security payments and CZK 7 bil in consumer taxes.

The report shows that without the additional EU money, the 2010 deficit would reach CZK 193 bil - one billion more than in 2009.

2011 budget: still relying on EU
EU funds will remain equally important for the Czech state finances even in 2011.

The budget approved three weeks ago expects that the Czech Republic's payments to the EU will remain on the same level as in 2010, while the country will receive CZK 21 bil (EUR 840 mil) more from the funds. The deficit will shrink by the same sum, to CZK 135 bil.

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