Milos Zeman and Wolfgang Schuessel, the prime ministers of the Czech Republic and Austria, reached a compromise yesterday regarding CEZ’s Temelin nuclear plant. The most important outcome of their 8-point agreement is that the Czech Republic will allow an examination of the plant’s environmental impact and its safety. The examination will be done under the supervision of the European Commission, and the plant will be judged against the EU standards, and the Czech side will respect the findings. The Czech Republic agreed that the plant will not be commercially launched before the findings are known; given that the commercial launch is scheduled for May 2001, we expect the findings to be presented by then. The EU Commissioner Guenther Verheugen will lead further negotiations on the subject between Austria, the Czech Republic and the EU. In our view, using the EU standards for judging Temelin implies a high probability that the plant will pass the test. Generally speaking, achievíng the direct involvement of the EU is a success for the Czech government. The deal in our view opens the way for the ultimate settlement of the official Austrian protest against Temelin. We do not expect any major response by the stock to the agreement. We reiterate our buy recommendation.