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Czech President Milos Zeman has stirred criticism within his Prague leadership, divided the European Union, made isolated Russians gleeful and led to the U.S. ambassador to the Czech Republic being banned from Prague Castle.

The uproar, in a country once dominated by the Soviet Union, stems from Zeman's plans to attend a May 9 Victory Day parade in Moscow.

Most Western leaders have sent their regrets to Russian President Vladimir Putin's invitations for celebration of the 70th anniversary of the Allied defeat of Nazi Germany. Their responses amounted to a unified reprimand of Russia's seizure of Crimea last year and its support for separatist rebels occupying eastern Ukraine.

Almost unified.

Zeman, whose post is supposed to be ceremonial and removed from foreign policy decisions, has bolted from the Western pack and announced that he will attend the Red Square parade to honor the memory of Soviet soldiers who liberated Czechoslovakia from the Nazis.

That decision prompted U.S. Ambassador Andrew Schapiro to observe via Twitter that Zeman's presence at the parade might prove "awkward," as he will be the only head of state from the 28-nation European Union in attendance. He will be in the company of the leaders of China, North Korea, Serbia and other states not yet emerging from communist rule.

Zeman reacted to Schapiro's tweet with fury.

"I cant imagine the Czech ambassador in Washington would give advice to the American president where to travel," Zeman told the online news site Parlamentni Listy. "I wont let any ambassador have a say about my foreign travels. ... I am afraid that after the statement, Schapiro's door to the Prague Castle is closed."

Czech government leaders, who have stood with their European Union allies on sanctions against Russia and refrained from high-level visits to Moscow, were quick to distance themselves from the president. Business New Europe, an online Eastern European news site, chastised the Prague cabinet officials for being too mild-mannered in their attempt "to take ownership of the country's foreign policy from the loose cannon that is President Milos Zeman."

Czech Prime Minister Bohuslav Sobotka told Ceska Televize on Monday that it was "unsuitable" for Zeman to bar Schapiro from the historic castle, and said he wished the president's attitude toward foreign policy would be "a bit more professional."

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Czech president breaks with allies over Russia parade, blasts U.S. envoy

BRUSSELS: European Union regulators are scrutinising four EU countries' treatment of banks' deferred tax assets (DTAs) to see if they constitute potentially illegal state aid, the European Commission said on Tuesday.

The EU executive said it had contacted authorities in Spain, Italy, Portugal and Greece following requests from some lawmakers in the European Parliament and other parties about state guarantees on such assets.

A deferred tax asset is an asset used to reduce the amount of tax subsequently due, such as from a loss-making period, to a future period of profit when tax would normally be due.

Under globally agreed Basel III capital rules, banks will not able to include DTAs that rely on future profitability to demonstrate their ability to absorb losses. These assets will have to be deducted by 40 percent this year, rising to 100 percent from 2018.

Their treatment is significant because local accounting behaviour, such as allowing DTAs to be converted into tax credits, can boost banks' core capital and so help prop up a country's financial sector.

European Competition Commissioner Margrethe Vestager has authorised a letter be sent to each member state requesting information. The Commission said this did not amount to a formal investigation.

"To be clear, the process is at a very early stage. We cannot prejudge whether a formal investigation is needed or the outcome of the Commission's assessment of these measures," the EU regulator said.

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European Union studies four countries over banks' deferred tax assets

European Union flags flutter outside the EU Commission headquarters in Brussels February 2, 2015. REUTERS/Francois Lenoir

BRUSSELS (Reuters) - European Union regulators are scrutinising four EU countries' treatment of banks' deferred tax assets (DTAs) to see if they constitute potentially illegal state aid, the European Commission said on Tuesday.

The EU executive said it had contacted authorities in Spain, Italy, Portugal and Greece following requests from some lawmakers in the European Parliament and other parties about state guarantees on such assets.

A deferred tax asset is an asset used to reduce the amount of tax subsequently due, such as from a loss-making period, to a future period of profit when tax would normally be due.

Under globally agreed Basel III capital rules, banks will not able to include DTAs that rely on future profitability to demonstrate their ability to absorb losses. These assets will have to be deducted by 40 percent this year, rising to 100 percent from 2018.

Their treatment is significant because local accounting behaviour, such as allowing DTAs to be converted into tax credits, can boost banks' core capital and so help prop up a country's financial sector.

European Competition Commissioner Margrethe Vestager has authorised a letter be sent to each member state requesting information. The Commission said this did not amount to a formal investigation.

"To be clear, the process is at a very early stage. We cannot prejudge whether a formal investigation is needed or the outcome of the Commission's assessment of these measures," the EU regulator said.

(Reporting by Foo Yun Chee and Philip Blenkinsop; Editing by Adrian Croft and Mark Potter)

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EU looking into four countries' treatment of banks' deferred tax assets

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Greece opposes EU's sanctions on Russia, Tsipras tells Tass

Greece opposes European Union sanctions imposed against Russia over the conflict in Ukraine, Prime Minister Alexis Tsipras said, denouncing the approach as senseless and calling for a negotiated solution.

Greece has suffered from a Russian food import ban that President Vladimir Putin imposed in response to the sanctions, Tsipras said in an interview with state-run Russian news service Tass published on Tuesday. After his government was sworn in two months ago, Tsipras said that he told EU leaders that they couldnt assume he would support the penalties.

We disagree with sanctions, Tsipras told Tass. I see it as a road to nowhere.

Greece, Europes most-indebted state, is locked in negotiations with euro-area countries and the International Monetary Fund over the terms of its 240 billion-euro ($258 billion) rescue. The standoff, which has left Greece dependent upon European Central Bank loans, risks leading to a default within weeks and the nations potential exit from the euro area.

After a Syriza-led government assumed power in Greece in late January, Tsipras said he called EU President Donald Tusk and Federica Mogherini, the 28-nation blocs foreign-policy chief, to tell them that they had to seek the new cabinets position before making decisions.

The new European security architecture must include Russia, Tsipras said. Greece, as an EU member state, can be a link, a bridge between the West and Russia.

The need for a unanimous EU vote to renew the trade restrictions gives skeptics like Greece leverage over the UK, Poland and the Baltic states, the leading advocates for maintaining the pressure on Russia. At a March meeting in Brussels, EU leaders made a pledge to extend sanctions until the end of the year while leaving open the possibility that the trade and investment curbs might not be renewed when they expire in July.

Postponing the final decision gave Putin time to cultivate growing opposition to sanctions among the leaders of some countries in central and southern Europe.

Putin, whose relations with EU leaders have worsened to a post-Cold War low because of the conflict in Ukraine, in February invited Tsipras to Russia. The Greek premier plans to visit Moscow on April 8 and will return for World War II victory celebrations in early May.

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Greece opposes EU's sanctions on Russia, Tsipras tells Tass