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The Czech government has approved a state budget deficit of 38.1 billion crowns (for an overall fiscal gap of 1.5 percent of GDP) for 2009, as it attempts to reign in spending and push further reforms. On Friday the Finance Minister Miroslav Kalousek called the proposal, which is the equivalent of around 2.5 billion US dollars, “ambitious”, stressing the proposed fiscal trajectory was a return to “civilised levels”. According to the minister, savings cuts across government ministries will be required, although spending in some sectors – such as education – is expected to go up. The 2009 budget plans on spending to drop to 1,053 billion crowns, down from 1,107.3 billion this year.

Gerard Houllier, former Liverpool coach in the English Premiership, has reacted angrily to reports he had approached the Czech Football Association over the post of national side manager. On Friday association representatives claimed they had received an email from Mr Houllier expressing apparent interest, but that turned out to be fraudulent say sources including the Czech daily Mladá fronta Dnes. A Czech Football Association representative has since apologised to Mr Houllier for the mistake. The Czech Republic’s national squad is without a manager since Karel Bruckner stepped down, following the Czechs’ defeat in the group stage of Euro 2008 in Austria and Switzerland. The association is aiming tol find a successor to Mr Bruckner by next month.

The Czech branch of Transparency International has called on the finance minister, Miroslav Kalousek, to prevent what the corruption watchdog sees as billions of crowns in potential damages related to a controversial government tender. The tender is aimed at cleaning up damages to the environment dating back to the communist era, but the government is planning on commissioning just a single firm to oversee the project, an order estimated as worth 115 billion crowns (the equivalent of around 7.5 billion US dollars). Critics have charged that the government has approached the issue carelessly and also suggested that analysis in the tender’s preparation was faulty. Others fear that the mammoth deal – dubbed the “deal of a century” by Hospodářské noviny - could invite influence peddling and corruption.

The police have shelved their investigation into an alleged bribery attempt of a Czech senator back in February during the country’s presidential election. Senator Josef Novotný, a member of the Independents/European Democrats, maintained he was offered a bribe of two million crowns if he voted for incumbent Václav Klaus. Mr Novotný voted for Mr Klaus’s opponent Jan Švejnar. A police spokesman said on Friday that officers had uncovered no evidence of wrongdoing. The senator, meanwhile, admitted earlier that he had no tangible proof, stressing the bribe had been offered person-to-person.