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The government also approved the outline for a new amendment on sick-leave benefits on Wednesday, with Minister for Labour and Social Affairs Zdenek Skromach putting forth the proposal that sick-leave benefits be paid only for work days missed. The bill also aims to reduce sick-leave pay to just 35 percent of one's regular salary for the first three days away from the workplace. On additional days patients would receive up to 70 percent of their regular pay. The plan, meanwhile, has met with resistance from both doctors and entrepreneurs. Entrepreneurs are upset the bill will count on employers to cover the first fourteen days of benefits, while doctors have expressed dissatisfaction with a planned fine aimed at discouraging medical professionals from treating malingerers lightly.

The cabinet has said the higher band of VAT will be reduced from 22 to 19 percent. The change will come into effect on May 1st, when the Czech Republic joins the European Union. The lower band will remain unchanged at 5 percent, although some items will be moved to the higher band. The announcement was made after seven hours of talks on Sunday between representatives of the ruling coalition. The changes mean that items such as cars, electronic goods, clothes and telecommunications should be cheaper from May 1st.

The deputy leader of the senior coalition Social Democrats, Zdenek Skromach, has said discussion on the proposed reform of the country's healthcare system has been postponed. Mr Skromach said the proposals, submitted by the Health Minister Marie Souckova, had been taken off the agenda of Sunday's talks between coalition leaders. Mr Skromach said there would not be enough time for a discussion on both tax and healthcare reform. The proposed healthcare reforms are controversial, as they envisage reducing the number of doctors and increasing the financial burden on the patient.

Czech President Vaclav Klaus and Russian Ambassador Igor Savolsky met at the presidential retreat at Lany on Friday. Mr Savolsky, who has been representing his country in the Czech Republic for three years, is expected to leave his post early this year. He has been meeting with senior Czech politicians this week to discuss Czech-Russian relations before his departure. Both President Klaus and Prime Minister Vladimir Spidla, with whom Mr Savolsky met on Thursday, agree that economic and political bilateral relations are at their best since the fall of Communism. Mr Savolsky's most likely successor is Russian Deputy Foreign Minister Alexej Fedotov.