Czech Republic - Factors To Watch on Jan 29

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FINMIN SEES LOWER SPENDING

Mandatory spending on welfare and health should drop by 30 billion crowns ($1.37 billion) next year, Finance Minister Miroslav Kalousek said.

He also plans to lower the value added tax to 17-18 percent form 19, and raise the preferential lower VAT rate to 7-9 percent from 5 percent.

Pravo, page 4, and Hospodarske Noviny, page 1.

[RTRS-LEN-CZ-GVD]

FUTURES TRADING WITH CEZ , ERSTE STARTS

The Prague Stock Exchange will launch trading with futures on shares in power firm CEZ and Erste Bank.

[RTRS-LEN-CZ-STX]

WIND STORMS HALT TRAFFIC

Wind and snow storms halted traffic at a number of roads overnight, including the main road from Prague to Vienna.

Czech Radio. [RTRS-LEN-CZ-WEA]

GOVERNMENT MEETS

The government holds a meeting. News conference at 1000 GMT.

[RTRS-LEN-CZ-POL]

MERKEL OPTIMISTIC, CZECH PM CRITICISES CONSTITUTION

German Chancellor Angela Merkel said on Friday she was optimistic the European constitution could be revived despite hearing deep criticisms of the treaty during a meeting with Czech Prime Minister Mirek Topolanek.

[ID:nL26668011] [RTRS-LEN-CZ-DIP]

CIVIC DEMOCRATS LEAD POLLS

The Czech rightist Civic Democrats continue to hold a lead over the leftist opposition Social Democrats after their centre-right cabinet won a parliamentary vote of confidence last week, a poll showed.

[ID:nL26600408] [RTRS-LEN-CZ-POL]

MITTAL FINE SCRAPPED

The Czech Finance Ministry has cancelled a 2.4 billion crown ($109.9 million) fine against Mittal Steel Ostrava, a unit of Arcelor Mittal , which had been levied for alleged overpricing of coke.

[ID:nL26835616] [RTRS-LEN-CZ-STL]

RATES ON HOLD

The Czech central bank (CNB) left interest rates on hold at its monthly board meeting on Thursday, and gave the market a clear signal that policy in the European Union member was unlikely to be tightened in the coming months.

[ID:nL25513531] [RTRS-LEN-CZ-CEN]

HIGHLIGHTS from c.bank news conference: [ID:nL25636968]

MERKEL IN PRAGUE

German Chancellor Angela Merkel visits Prague on Friday to discuss the European Constitution. The senior Czech coalition party, the Civic Democrats, reject the treaty and propose drafting a new one.

[RTRS-LEN-CZ-DIP]

Overview of past economic data and market forecasts For Instant Views of key economic data click on [CZ/INSTANT] For summary of economic data and forecasts For diary of forthcoming Czech events [CZ/DIARY] For calendar of east European economic indicators [CONV/DIARY] TOP NEWS -- Emerging markets [TOP/EMRG] TOP NEWS -- Convergence watch [TOP/EAST]

For an economic indicator diary for the euro zone, the United States and other Group of Seven countries see

For real-time stock market index quotes click in brackets: Warsaw WIG20 Budapest BUX Prague PX

News editor of the day: Jan Lopatka on +420 224 190 477; fax: +420 224 229 935

E-mail: prague.newsroom@reuters.com

Reuters Messaging: jan.lopatka.reuters.com@reuters.net

((Compiled by Jan Lopatka; Reuters Messaging: rm://marek.petrus.reuters.com@reuters.net; e-mail: prague.newsroom@reuters.com or marek.petrus@reuters.com; Tel: +420 224 190 477)) ($1=21.84 Czech Crown)

[PRAGUE/Reuters/Finance.cz]