16-12-2016 15:52 | Chris Johnstone
In this week’s Business News: a Slovak businessman seeks the confiscation of Zdeňek Bakala’s property; Mountfield heads into Chinese hands; army radar contract won by Israeli firm; Airbnb-style stays soar; and Czech banks could face off crisis.
Police called on to confiscate Bakala assets
Mountfield bought up by Hong Kong company
Israeli company lands radar contract
Airbnb-style stays rise by 40 percent
Czech banks weather stress tests
© 1996–2015 Český rozhlas
25-11-2016 15:38 | Ruth Fraňková
In Business News this week: OKD to close Paskov by end-March; Hundreds of small pubs closing down ahead of EET; Grandi Stazioni to get compensation for lost investments; Czechs spend hundreds of millions more on books; Czech internet retailer makes first drone delivery.
OKD to close Paskov by end-March
The hard coal mining company OKD will terminate mining at its Paskov mine in the Frýdek-Místek district, northern Moravia, by the end of March, 2017. Around 700 miners are set to lose their jobs as a result of the closure. The rest of the employees will be moved to other mines that are still in operation. OKD, which employs some 12,000 people altogether, faces severe financial difficulties and filed for insolvency in March of this year.
Hundreds of small pubs closing down ahead of EET
Hundreds of small pubs closing down ahead of EET Hundreds of small pubs around the country are closing down due to the law on electronic cash registers which is due to come into effect on December 1st. Breweries say many small regular clients have announced they are quitting the market. Plzen Prazdroj says several hundred small outlets have scrapped orders as of December. This concerns largely small village pubs that do not serve food. The right-wing opposition parties, TOP 09 and the Civic Democrats have called on the government to scrap the project.
Grandi Stazioni to get compensation for lost investments
Czech Railways will pay the Italian developer Grandi Stazioni 565 million crowns in compensation for the money invested in the reconstruction of the Main Railway Station in Prague. Grandi Stazioni lost its 30-year lease of the station in October of this year after repeatedly failing to meet the reconstruction deadline. The Czech Railway Infrastructure Administration rejected its request for another two-year extension and asked Grandi Stazioni to vacate the premises. The developer is demanding 765 million crowns in compensation, but Czech Railways says it has not produced evidence the extra 200 million were actually invested.
Czechs spend hundreds of millions more on books
Czechs last year spent roughly 7.5 billion crowns (the equivalent of around 31.4 million euros) on books, a rise of around five percent year-on-year, according to the Association of Czech Booksellers and Publishers. The rise amounts to an increase of between 300 and 400 million crowns. The increase marks a turnaround after several years’ stagnation; according to the association, spending on books increased due to a lowering of the VAT rate on books as well as the improving economy.
Czech internet retailer makes first drone delivery
The Czech Republic’s second-biggest internet retailer, Mall.cz, delivered its first package by drone on Tuesday. The unmanned aerial vehicle took around five minutes to bring the delivery from a distribution centre near Prague to a customer 1.7 km away, landing on their garden. Boss Jakub Havrlant said the test made Mall better prepared for a discussion on possible legislative changes relating to the use of drones in the Czech Republic.
© 1996–2015 Český rozhlas
18-11-2016 14:45 | Chris Johnstone
In Business News this week: Robert Bosch gets incentives for České Budějovice expansion; Czech Republic seeks balanced trade with China; growth eases in third corner; PPF still in running for Plzeňský Prazdroj; finance ministry ups growth and budget prospects.
Robert Bosch to receive government incentives of up to 44 million crowns
Sobotka: Prague wants balanced trade and investment partnership with Beijing
Economic growth slows in third quarter
PPF in shortlist for Plzeňský Prazdroj and other brewing assets: report
Czech finance ministry ups growth figures, sees budget surplus in 2018
The Czech Ministry of Finance has upped its GDP growth expectations for this to 2.4 percent from the previous 2.2 percent. And the forecast for 2017 has also risen to 2.5 percent from 2.4 percent. The ministry expects a modest budget deficit of 0.2 percent of GDP both this year and next. But the budget should swing into a slight 0.1 percent surplus in 2018 and rise to 0.5 percent of GDP in 2019, according to the latest figures released Monday.
11-11-2016 13:23 | Chris Johnstone
In Business News this week: Agrofert companies under scrutiny; Czech Railways in dumping probe; Czech steelmakers protest Chinese imports; bumper tourist season; inflation quickens, and ČEZ profits down.
Anti-corruption watchdog focuses on Andrej Babiš empire
EU Commission probes Czech Railway prices
Czech steelmakers join Brussels protest over Chinese imports
Czech tourism sees best nine months since 2000
Inflation speeds up in October
ČEZ sees profits fall on low power prices
04-11-2016 13:19 | Ruth Fraňková
In Business News this week: Czech National Bank ups growth forecast for 2016; Exports seen topping 4.0 trillion crowns in 2016; Brussels poised to clear massive Czech renewables aid payment; Komerční Banka profits rise in first nine months; Czech Export Bank (ČEB) given 2.5 billion crown bailout:
Czech National Bank ups growth forecast for 2016
Exports seen topping 4.0 trillion crowns in 2016
Brussels poised to clear massive Czech renewables aid payment
Komerční Banka profits rise in first nine months
Czech Export Bank (ČEB) given 2.5 billion crown bailout
Arca Capital files state aid complaint with European Commission
Trade minister: EU-Canadian trade deal will open new opportunities
The Czech Republic has welcomed the signing of CETA, a long-delayed landmark trade deal, between Canada and the EU. The agreement was signed in Brussels by Canadian Prime Minister Justin Trudeau and top EU officials, following weeks of uncertainty due to opposition in Belgium. The Czech prime minister signed the agreement two weeks ago. Czech Trade Minister Jan Mládek said the Czech Republic and Canada share the same principles in trade and that the country would not have a problem meeting the set conditions. The Czech Republic expects the agreement to create new jobs, simplify exports and open up new markets for Czech firms in the area of engineering, chemicals production and health products
21-10-2016 14:31 | Jan Velinger
Business round-up this week: Central bank could maintain weak crown policy longer; New record for Czech car industry with million output; Government signs contract with GE; Lower house moves to extend diesel tax rebate.
Governor: Central bank could maintain weak crown policy to 2018
New record for Czech car industry with million output in nine months
Government signs contract with GE for aviation engines plant
Lower house moves to extend diesel tax rebate program to livestock farmers
Marked rise in state employees seen in recent years
The number of state employees in this country has grown by around 23,000 since 2012, according to data released by the Ministry of Finance. Nearly 440,000 people are now employed by the state in the Czech Republic, which has a population of 10.5 million. Annual salaries for such workers have increased by 16.6 billion crowns in the last four years to reach 149 billion crowns. The average state employee receives 27,000 crowns a month.
© 1996–2015 Český rozhlas
14-10-2016 15:57 | Jan Velinger
Business round-up this week: Government approves CETA agreement between EU and Canada; Škoda records best ever monthly worldwide sales in September; Solana Neratovice tops Czech polluters ranking; Budget Committee approves state budget proposal.
Government approves CETA agreement between EU and Canada
Škoda recorded best ever monthly worldwide sales in September
Arnika: Spolana Neratovice again tops Czech polluters ranking
Parliament’s Budget Committee approves state budget proposal for 2017
Huge outlet centre to open near Prague airport in 2017
A huge outlet retail centre is set to open near Prague’s Václav Havel Airport in autumn next year. Named Prague The Style Outlets, the centre will feature 190 shops on an area of 30,000 square metres, according to a news release on Tuesday from its backers, the companies Neinver and The Prague Outlet. The outlet centre, which will cost over one billion crowns to complete, will be the third facility of its kind in the Czech Republic.
© 1996–2015 Český rozhlas
07-10-2016 15:25 | Ruth Fraňková
In Business News this week: Czech National Bank makes second highest monthly forex intervention in August; Two ČEZ managers accused of licensing fraud; Grandi Stazioni loses lease of Main Railway Station in Prague; Transport of crude oil reserves from Germany may be at risk; Škoda Auto to extend working week in Kvasiny:
Czech National Bank makes second highest monthly forex intervention in August
Czech trade rebounds in August to 13.8 billion crown surplus
Two ČEZ managers accused of licensing fraud
Grandi Stazioni loses lease of Main Railway Station in Prague
Transport of crude oil reserves from Germany may be at risk
Škoda Auto to extend working week in Kvasiny
30-09-2016 16:10 |
Business round-up for this week: Czech National Bank to keep interventions against Czech crown; Czech competition agency approved acquisition of Čedok by Polish Itaka; SkyToll files official complaint over extended contract with Kapsch; Production of L-410 planes to remain in Moravia.
Czech National Bank to keep interventions against Czech crown
Czech competition agency approved acquisition of Čedok by Polish Itaka
Czech Republic's spot in Global Competitiveness report remains unchanged
SkyToll files official complaint over extended contract with Kapsch
Production of L-410 planes to remain in Moravia
The production of L-410 airplanes manufactured by the Russian-owned company Aircraft Industries will remain in Kunovice, South Moravia, representatives of the Russian company confirmed in talks with Czech Trade and Industry Minister Jan Mádek on Monday. The company’s employees had been holding a strike alert over fears that production would be reduced or moved to Russia. The situation in the company had been deteriorating, with sales of the LET aircraft in one of the main markets, Russia, dropping sharply. Many of the company's 900 employees have been forced to take leave with reduced wages. According to the company’s management the firm has acquired new orders from China and full operation should be renewed by November.
© 1996–2015 Český rozhlas
23-09-2016 14:49 |
Round-up of business news this week: The government approved the draft budget for 2017; Foreign debt rose to over 3.350 trillion crowns in second quarter; Škoda Transportation completed the first part of a major German contract; Bělobrádek apologised for VAT confusion; top brewer says it will raise prices.
Government agrees on draft state budget for 2017
Foreign debt rises to over 3.350 trillion crowns in second quarter
Škoda Transportation completes first part of major German contract
Bělobrádek apologises for VAT confusion
Brewer Plzeňský Prazdroj to raise prices from next month
16-09-2016 14:03 |
In Business News this week: Czech banks boost collective profits; apartment prices surge in second quarter; uncertainty over future of Aircraft Industries; ČEZ extends outage for Temelín reactor; exports to Russia continue to slide.
Banks see profit rise in first half of year
Apartment prices soar in second quarter
Industry minister seeks assurance over Aircraft Industries’ future
More nuclear woes for ČEZ
Double digit drop in exports to Russia to July
09-09-2016 14:41 | á
In Business News this week: Škoda Auto seen rolling out four new models in 2017; Average wages rise by 3.9 percent in second quarter; Union groups call for hike in minimum wage to 11,500 crowns a month; Central bank announces modest foreign currency interventions in July; Finance ministry revises expenditure and revenues but deficit proposal stands; Unemployment drops to 5.3 percent in June.
Škoda Auto seen rolling out four new models in 2017
Average wages rise by 3.9 percent in second quarter
Union groups call for hike in minimum wage to 11,500 crowns a month
Central bank announces modest foreign currency interventions in July
Finance ministry revises expenditure and revenues but deficit proposal stands
Unemployment drops to 5.3 percent in June
02-09-2016 14:45 | Ruth Fraňková
In Business News this week: Škoda Auto unveils new Kodiaq SUV in Berlin; Budget airline Ryanair planning two new routes from Prague next summer; ANO justice minister backs more powers for customs officials; Chinese investors CEFC free to buy high-end Prague hotel; Prisoners to keep working at call centre for mobile operator:
Škoda Auto unveils new Kodiaq SUV in Berlin
Budget airline Ryanair planning two new routes from Prague next summer
ANO justice minister backs more powers for customs officials
Chinese investors CEFC free to buy high-end Prague hotel
Prisoners to keep working at call centre for mobile operator
26-08-2016 14:29 | Ruth Fraňková
In Business News this week: Ostrava court starts bankruptcy proceedings against Vitkovice Power Engineering; Finance Ministry wants customs officials to investigate tax crime; Tax payers warned not to respond to fraudulent text messages asking them to pay arrears; Arbitration court rules Prague will not have to pay ČKD Praha DIZ 1.7 billion crowns; iDnes: Czech firearms, military equipment manufacturers, exported goods last year worth a record 15 billion crowns; Supreme Audit Office finds serious shortcomings in manner of funding renovation of heritage sites:
Ostrava court starts bankruptcy proceedings against Vitkovice Power Engineering
Finance Ministry wants customs officials to investigate tax crime
Tax payers warned not to respond to fraudulent text messages asking them to pay arrears
Arbitration court rules Prague will not have to pay ČKD Praha DIZ 1.7 billion crowns
iDnes: Czech firearms, military equipment manufacturers, exported goods last year worth a record 15 billion crowns
Supreme Audit Office finds serious shortcomings in manner of funding renovation of heritage sites
19-08-2016 10:26 | Jan Velinger
Business roundup: The average price of Prague flats has continued to go up; the military is assessing offers of mobile radars; an extra billion crowns from budget will go toward university teachers' pay; the Regiojet rail company posts numbers in the black.
Average price on new flats in Prague increased by 11 percent year-on-year
Vitkovice Power Engineering files for “reorganization“ bankruptcy
Military assessing offers of mobile radars for the army
Extra billion crowns to go toward university teachers’ pay in 2017
RegioJet posts 37 percent year-on-year increase in sales
© 1996–2015 Český rozhlas
12-08-2016 13:19 | Chris Johnstone
In this week’s Business News: mining company OKD heads for restructuring; hop crop seen rebounding; unemployment back on the up; Cobra delivers on tax evasion clampdown; more and older cars on road; and local wines make mark.
Creditors clear OKD restructuring
Hops harvest rebounds
Cobra delivers 2.0 billion on tax clampdown
More, and older, cars on Czech roads
Czech wines please French taste buds
© 1996–2015 Český rozhlas
05-08-2016 13:43 | Chris Johnstone
In Business News this week: first half homes loan figures set new record; central bank raises growth expectations for 2016; new car sales ease in July for first time this year; Komerční Banka squeezed on stock exchange after six month figures; and financial police poised to make a return.
Record home loan contracts and volume
Czech National Bank gives mixed news on growth
July figures take polish off new car sales outlook
Komerční Banka says margins severely squeezed in first half
Interior minister says financial police to return from 2017
© 1996–2015 Český rozhlas
29-07-2016 14:48 | Chris Johnstone
In Business News this week: OKD thrown 700 million crown lifeline; helicopter purchase tender ready for take-off; Forever 21 to launch in Czech Republic; audacious proposal for planning permissions; and interior ministry held to account.
OKD offered 700 million to keep mining operations going
Helicopter tender likely to be open to only EU and NATO bidders
US fashion firms seeks Prague store launch
Proposal to drop planning permission for houses
Accounting errors of around 5.0 billion crowns at interior ministry
© 1996–2015 Český rozhlas
22-07-2016 13:13 | Ruth Fraňková
In Business News this week: Change of hands looms for Prague’s tallest office bloc; Dubai company launches arbitration over payments for Prague plots; Czech total of unpumped EU funds shrinks to 6.8 billion crowns; Czech Republic ranks 26th on BDO’s investment potential list; ČEZ applies for EIA over new blocks at Dukovany; Mortgage rates reach new low of 1.87 percent:
Change of hands looms for Prague’s tallest office bloc
Dubai company launches arbitration over payments for Prague plots
Czech total of unpumped EU funds shrinks to 6.8 billion crowns
Czech Republic ranks 26th on BDO’s investment potential list
ČEZ applies for EIA over new blocks at Dukovany
Mortgage rates reach new low of 1.87 percent
© 1996–2015 Český rozhlas
15-07-2016 13:22 | Chris Johnstone
In this week’s Business News: Brexit is Czech business opportunity says top government official; foreign workers on the rise; ČEZ starts fresh arbitration proceedings in Balkans; inflation remains at low levels; and single payment site costs billions without result.
Czech Republic can tempt British-based companies
Foreign workers triple over 15 years
ČEZ launches arbitration over Bulgarian distribution and sales units
Inflation still way below central bank target level
Single payment point a black hole with no results says audit office
© 1996–2015 Český rozhlas
08-07-2016 14:18 | Ruth Fraňková
Industrial production accelerates in May to 8.6 percent
Government approves increased tax credit for families with two or more children
Foreign trade surplus shrinks to 18.2 billion crown in May
Avast to acquire Dutch rival AVG Technologies
Social housing bill should be passed by government: Jiří Dienstbier
Czech truck manufacturer Tatra Trucks making inroads in Middle East, Asia, looking to increase workforce, writes iDnes
© 1996–2015 Český rozhlas
01-07-2016 12:54 | Ruth Fraňková
In Business News this week: Finance ministry cuts funds earmarked for servicing national debt; Czech Statistical Office improves figures on Czech economy growth; Czech Republic wins clearance for key transport projects to go ahead; New bill means large retail outlets must close on state holidays; Czech arms makers see healthy growth in exports; ČEZ seeks to claw back billions from Dukovany closure.
Finance ministry cuts funds earmarked for servicing national debt
Czech Statistical Office improves figures on Czech economy growth
Czech Republic wins clearance for key transport projects to go ahead
New bill means large retail outlets must close on state holidays
Czech arms makers see healthy growth in exports
ČEZ seeks to claw back billions from Dukovany closure
© 1996–2015 Český rozhlas
24-06-2016 15:51 | Jan Velinger
Business round-up this Friday: Brexit will slow Czech economy says analysts; government commits to teacher pay rise; Country plans for more agricultural attachés; Fruit harvest expected to see 28 percent drop.
Brexit to slow down Czech economy: analysts
Government commits to minimum six percent pay rise for teachers
Czech Republic planning to post more agricultural attachés abroad
Fruit harvest expected to see 28 percent drop year-on-year
Hotel to open in Prague’s Dancing House
© 1996–2015 Český rozhlas
17-06-2016 14:03 | Chris Johnstone
In this week’s Business News: deal signed for ICBC bank branch to establish in Czech Republic; car production rockets in first five months; low crown promotes laziness warns president; nuclear energy coordinator given green light; and financial sector still looking robust.
ICBC cleared to open Czech unit
Czech car production climbs 13 percent
Low crown damages exporters warns president
Nuclear point man appointed
Central bank sees few worries over financial stability
© 1996–2015 Český rozhlas
In this week’s Business News: police seek charges over Blanka tunnel; Czechs bet on future; fewer jobless and more jobs; state debate loans for miner OKD; and the central bank spends around 11 billion crowns in April in undermining the crown.
Prague Police recommend charges over Blanka tunnel
Police in Prague have recommended that charges be pressed against a City Hall official in connection with the Blanka tunnel construction project, Czech Television reported on Thursday. Jan Beránek, the one-time head of a City Hall investments department, is accused of agreeing to an overpriced contract that caused over 30 million crowns of damage to the city. The Blanka tunnel was opened last year, four years behind schedule and around 10 billion crowns over-budget.
More bets but lower takings for betting companies
Czechs last year placed bets totalling 152.2 billion crowns. That’s a rise of just over 10 percent on the previous year. Winnings paid out from bets came to almost 122 billion crowns, an increase of just over 14 percent, leaving the betting companies with outright earnings of just over 30 billion. According to the Czech Ministry of Finance that is around a billion crowns down on the 2014 results.
Unemployment drops to 5.4 percent in May
The jobless rate in the Czech Republic in May dropped to 5.4 percent from April’s 5.7 percent. The overall number of unemployed has fallen to just under 395,000, that’s the lowest total since January 2009. The number of vacancies being offered through the national labour office stands at just over 129,000. That is the highest total since October 2008. The office expects the jobless total to continue shrinking in the coming months.
Industry minister says 1 billion crown loan possible for OKD
The state should lend bankrupt mining company OKD up to 1 billion crowns, the minister of industry and trade, Jan Mládek, said on Wednesday morning. A day earlier Finance Minister Andrej Babiš said he was looking into the conditions under which the state could make loans to OKD. Mr. Babiš put forward a figure of 400 million crowns that the firm would need to keep operating until August; however, Mr. Mládek said he did not know how his cabinet colleague had arrived at that amount. The industry minister said that only the state would risk making a loan to OKD but there was no 100-percent guarantee it would be repaid.
Czech National Bank spends 11 billion crowns in April on low crown
The Czech National Bank intervened on the foreign exchange market to the tune of 11 billion crowns in April in order to combat the growing strength of the Czech crown, according to figures it released on Tuesday. This brings to 530 billion crowns the total amount the central bank has spent on euros since November 2013, when it first intervened in a bid to keep the crown at around 27 to the common European currency. Last month the board of the Czech National Bank said it would probably maintain its weak crown policy until the middle of next year.
© 1996–2015 Český rozhlas
In Business News this week: State budget surplus for May the best since 1993; Economic confidence falls according to PMI index; Number of grocery stores in Czech Republic keeps dropping; Tax freedom day advances to June 2 for Czechs; Czech economy grew by lowered 3.0 percent in first quarter.
State budget surplus for May the best since 1993
The state budget ended May with a surplus of 22.4 billion crowns, the best May result since 1993. Details were given by Minister of Finance Andrej Babiš to the lower house of parliament. The minister added that tax revenues during the first five months of the year are nearly 24 billion more than during the same period in 2015. The target budget deficit for the whole of 2016 has been set at 70 billion crowns.
Economic confidence falls according to PMI index
Economic confidence has dropped in the Czech Republic for the fourth month running according to a poll of key managers in manufacturing. The Purchasing Managers’ Index (PMI) fell to 53.3 points in May from April’s 53.6 points according to the monthly index released by Markit Economics. The index is based on the state of new orders, stocks at factories, delivery deadlines, and the recruitment of new workers. Any score higher than 50 is still in positive territory. The fact that many companies are still hiring is seen as an indication that growth is not going to peter out altogether.
Number of grocery stores in Czech Republic keeps dropping
The number of grocery stores in the Czech Republic has dropped by four percent since 2013, to 12,294, according to data released by the Nielsen consultancy company on Thursday. Small grocery stores with a shopping area under 400 square metres saw the biggest drop in numbers. The number of supermarkets went down as well, by 28 over the past three years, while the number of hypermarkets increased by 19. Supermarkets and hypermarkets account for 80 percent of the overall sales of grocery items in the Czech Republic, which is the highest proportion in Central Europe.
Tax freedom day advances to June 2 for Czechs
Czechs could celebrate tax freedom day on June 2 according to the calculations of the Liberal Institute, that’s after a total of 153 working days. Last year Czechs had to work 155 days before they started earning for themselves. The institute said that the Czech Republic is still trailing many advanced OECD countries where day freedom day comes earlier. According to consultancy, Deloitte, tax freedom day this year comes later, on June 20.
Czech economy grew by lowered 3.0 percent in first quarter
The Czech economy grew by 3.0 percent year-on-year in the first quarter of 2016, according to revised figures released by the Czech Statistical Office on Friday. Compared to the previous quarter, the country’s gross domestic product grew by 0.4 percent. The figures are slightly lower than the previous estimate which expected a year-on-year growth of 3.1 percent and quarterly growth of 0.5 percent.
© 1996–2015 Český rozhlas
Czech exports to US see rapid growth
Czech exports to the United States have grown rapidly in the past three years, approaching the 100 billion crown mark for the first time ever, according to the Czech Statistics Office. This makes the US the country’s biggest export partner outside the EU and the most dynamically growing market for the Czech Republic regarding mutual trade.
The Czech Republic has the 30th largest export economy in the world and although 83 percent of the country’s exports are destined for EU member states, trade with the US has seen a significant boost in recent years. Exports to the US have almost doubled in the past decade and since 2011 the volume of Czech exports to the country has exceeded the volume of US imports. The US market is now one of the top ten export destinations in terms of export volume. In terms of value creation the United States ranks among the top three countries. In 2015 Czech companies exported goods to the US worth 92.2 billion crowns, a 2.4 percent share of the country’s overall exports, and an export volume comparable to that with Spain or Belgium.
In terms of economic added value, the United States is becoming a key destination for the export-dependent Czech economy, with an almost 6% share of added value, putting it in second position behind Germany (19%), according to the Czech Association of Small and Medium Sized Businesses. This is also reflected in the composition of exported product ranges, as the Czech Republic is exporting more and more products with higher added value to the US, whereas previously the country exported a cheaper line of products.
The most common export commodities to the US are now cars and vehicle parts, engines and tyres, turbines and turbine pumps, pharmaceuticals and microscopes. The amount of tyres exported to the US has grown by 175 percent in the past ten years and last year the sales volume exceeded 4.6 billion crowns. On the other hand, the amount of semi-products and materials exported has dropped. A further point of interest is that services now account for almost a third of the total volume of exports.
American imports to the Czech Republic, dominated by machinery and transport equipment, reached 81.9 billion crowns in 2015, making up 2.4 percent of overall imports. This puts the US in twelfth place as regards the volume of imports. The US is also the fifth largest investor in the Czech Republic, where the amount of American investments is approximately a quarter compared to German investments.
© 1996–2015 Český rozhlas
27-05-2016 | Jan Velinger
Business round-up: Finance Ministry envisages budget deficit of 48.5 billion crowns; PM outlines plan for rise in minimum wage; bus drivers threaten action over low wages; Rusnok named new central bank governor.
Finance Ministry envisages next year’s budget deficit at 48.5 billion
A Finance Ministry proposal for next year’s budget, which is to be debated by the government on Monday, sets next year’s deficit at 48.5 billion crowns, the Czech News Agency reported on Thursday. For 2018 the ministry envisages a deficit of 38.5 billion and for 2019 18.5 billion. The Finance Ministry is willing to increase the deficit in case of higher spending by ministries and other state authorities. Under the agreement between coalition parties, the deficit could reach up to 60 billion crowns next year and 50 billion crowns in 2018.
Sobotka outlines plan for rise in minimum wage
The Ministry of Labour and Social Affairs is to send a proposal to the government to increase the minimum wage in the Czech Republic from next year, Prime Minister Bohuslav Sobotka told a gathering of trade union leaders on Tuesday. The plan envisages a rise from the current figure of 9,900 crowns a month to 11,000 at the start of January. While the unions would like an increase of 1,500 crowns from the present level, employers say they regard a rise of 600 or 700 crowns as realistic.
Bus drivers warn of escalating action over minimum wages
Bus drivers have warned they will be starting an escalated series of industrial action over claims for minimum wages including extended strikes. Drivers on public service routes say they warned of action six months ago but negotiations since have not got anywhere. Many of the drivers, now on wages of around 70-80 crowns an hour, say the government should set a 100 crown an hour minimum wage. They say wages are being undermined by public tenders for operating bus routes in which the bus company making the lowest bid and often offering worst conditions to drivers often land the contract.
Jiří Rusnok appointed as next governor of Czech National Bank
Czech President Miloš Zeman this week appointed former caretaker prime minister and minister of finance Jiří Rusnok as the next governor of the Czech National Bank. Rusnok, already a member of the central bank board, will take over from Miroslav Singer whose mandate officially ends in June. Zeman highlighted the policy differences with Rusnok over the current low crown policy but pointed out that he had been appointed for his expert and practical public and professional experience. Zeman has called for an ending of the low crown policy as soon as possible while the central bank sees it continuing until at least mid-2017.
Rudolf Jelínek spirits producer posts record turnover
Czech spirits producer Rudolf Jelínek posted a record turnover last year amounting to nearly 470 million crowns. The company’s profit was 70 percent higher than in the previous year, the general director Pavel Dvořáček told the Czech News Agency on Thursday. The traditional plum liquor producer has finally recovered from the methanol scandal of 2012, during which 47 Czechs died of alcohol poisoning and which resulted in a decrease in demand for hard alcohol. In 2012, the company suffered losses to the tune of 19 million crowns.
© 1996–2015 Český rozhlas
20-05-2016 15:06 | Ruth Fraňková
In Business News this week: Bulgarian competition watchdog accuses Energo Pro of abusing dominant position on market; Pig breeding in severe crisis; Minister for Foreign Affairs says staffing to be boosted to deal with Ukrainian job seekers; New World Resources fails to announce first quarter results; Seznam hits new turnover and profit figures.
Bulgarian competition watchdog accuses Energo Pro of abusing dominant position on market
Bulgaria's competition watchdog has accused the Czech power distributor Energo Pro of abusing its dominant position in the electricity market. The Commission for Protection of Competition said that Energo Pro's refusal to sign a long-term contract to purchase electricity generated from renewable sources at a price set by Bulgaria's energy regulator was unjustified. Earlier this week the commission also accused the local unit of the Czech power utility CEZ of abusing its dominant position and acting against the interests of consumers.
Pig breeding in severe crisis
Pig breeding in southern Moravia is reported to be down by 11 percent in the first quarter, according to the Czech Statistics Office. Pig breeding has suffered a serious setback due to severe competition within the EU, low meat prices and the Russian embargo. Pig farms around the country have been reducing animal numbers and are now only able to cover half of the country’s port consumption.
Minister for Foreign Affairs says staffing to be boosted to deal with Ukrainian job seekers
Minister for Foreign Affairs Lubomír Zaoralek has said that officials will this year be able to process around 5,000 Ukrainians seeking jobs in the Czech Republic. The minister said staff at the consulate in Lvov would be boosted in the next weeks and officials would also be added in Prague so that visa applications and other procedures could be dealt with. Around 5,000 applications from workers, around four times the total for last year, could be handled in 2016, he added. Employers have criticized the slow pace at which Ukrainians are being brought into the Czech Republic to fill jobs since a new programme was introduced in November last year. The Ministry of Industry and Trade last week said 69 Ukrainians were involved in the new project and 40 had or were in the process of getting work permits as a result.
New World Resources fails to announce first quarter results
New World Resources (NWR) said Wednesday that it is not in a position to announce first quarter results. The results were due to be announced on May 18. NWR, the biggest shareholder in the Czech hard coal mining company, OKD, said results could not be made public as planned due to the filing for insolvency made last week for the mining company. Trading of NWR shares have been suspended on London, Prague, and Warsaw exchanges. An insolvency manager for the mining company, which employs around 10,000 in the Moravia-Silesia region, has already been appointed.
Seznam hits new turnover and profit figures
Turnover and profit for the Czech Republic’s biggest Internet search engine company Seznam rose by around 10 percent last year. Turnover climbed by 9.0 percent to 3.41 billion crowns and profit before tax by 10 percent to 1.25 billion compared with 2014. Both figures are new records. Income related to Seznam’s search related ads was up more than 20 percent year-on-year. Those ads represent around 40 percent of the company’s overall ad income.
© 1996–2015 Český rozhlas
13-05-2016 12:38 | Jan Velinger
Business roundup: Škoda Auto union seeks wage hikes for companies linked to car producer; Cabinet backs welfare payments for laid off OKD workers; One week paternity leave approved; Globus planning billion crown investments in Czech outlets.
Škoda Auto union seeks wage hikes for companies linked to car producer
The KOVO union which represents many workers at the Czech Republic’s biggest carmaker, Škoda Auto, says that it is pressing for sub-contractors and other companies closely linked to the car maker to make adequate offers of pay rises to their employees. The union’s move follows its success in agreeing an 11.2 percent pay hike over two years at the car maker. Letters calling for collective negotiations to start with the company AB Facility, SAPE, and ISS Facility Services were due to go out this week according to the union newsletter, the ČTK agency reported. Škoda Auto announced a 6.5 percent rise in profits to a record euros 708 million last year.
Cabinet backs welfare payments for laid off OKD workers
The government has approved special welfare payments for workers laid off by the bankrupt mining company OKD. Under a plan announced on Wednesday by Prime Minister Bohuslav Sobotka, they are to receive between 7,000 and 8,000 crowns a month for a period of between three months and five years, depending on years of service and age. The payments will go to all staff at OKD, not just miners. The company has around 10,000 employees in a region – Northern Moravia – with relatively jobless rates.
Government approves week’s paternity leave
The Czech government has approved a week’s leave for men who have become fresh fathers, the prime minister, Bohuslav Sobotka, announced on Wednesday. If men subsequently go on paternity leave they will receive 70 percent of their base salary, which is the same percentage currently received by women on maternity leave. The cabinet vote had been delayed after Finance Minister Andrej Babiš came out against the plan. It will now go before the Chamber of Deputies.
Globus planning billion crown investments in Czech outlets
The hypermarket chain Globus has announced it is planning to invest four billion crowns into its Czech outlets in the next three years. The plans entail a modernization of its present stores, an expansion of the network and the setting up of a new e-shop. Last year Globus’s sales in the Czech Republic reached 23 billion crowns and the hypermarket chain is aiming to increase them by another 10 billion crowns. Globus came to the Czech Republic twenty years ago and operates 15 hypermarkets in the country.
Sale of Fairtrade products in Czech Republic stagnating
The sale of Fairtrade products in the Czech Republic has reached a plateau after several years of growth, according to the head of Fairtrade Czech Republic and Slovakia Hana Chorváthová. In 2015 Czechs bought 200 million crowns worth of Fairtrade goods, mostly coffee and chocolate. Coffee accounts for 61 percent of all Fairtrade products sold in the country, followed by chocolate, tea, sugar and biscuits.
© 1996–2015 Český rozhlas
06-05-2016 14:27 | Ruth Fraňková
In Business News this week: CNB reports zero foreign currency intervention in March; Tax Freedom Day to come on June 2; twelve construction companies fined for cartel activity; betting company Fortuna sees operating profit slump on higher Czech taxes; companies named after their owners benefit from greater trust, says study.
CNB reports zero foreign currency intervention in March
The Czech National Bank reported Friday that it did not intervene in the foreign currency markets in March to maintain its low crown policy. In February the central bank intervened to the tune of 623 million euros and in January by just over 2.15 billion euros to keep the crown near or lower than 27 crowns to the euro. Since the start of the low crown policy at the end of 2013 it has spent around 19 billion euros on maintaining the target exchange rate. The bank says it will maintain the low crown policy until at least the middle of next year when it hopes inflation will approach its annual target rate of 2.0 percent.
This year’s Tax Freedom Day to come on June 2
This year’s Tax Freedom Day in the Czech Republic falls on June 2nd, according to the Prague-based Liberal Institute, referring to estimates by the OECD. Tax Freedom Day is the day in the year when the average Czech has earned enough to pay his annual tax bill. This means that people’s entire earnings in the first 153 days of the year will be paid to the authorities, which is the lowest figure since 2000, while anything earned after that is theirs alone. This year, the Tax Freedom Day comes three days earlier than last year, and four days later than the OECD average.
Twelve construction companies fined for cartel activity
The Czech competition office has announced a fine of 278 million crowns on a group of 12 construction companies. The ČTK agency said that the largest fine, amounting to tens of millions of crowns, had been imposed on the Hochtief company. The Polish-based building company, Swietelsky, had cooperated with the competition watchdog in a bid to reduce its fine, the agency added. The cartel allegedly covered building contracts in South Bohemia and the Vysočina. The companies can still appeal the fines and findings of the authority.
Betting company Fortuna sees operating profit slump on higher Czech taxes
Betting company Fortuna said it business boomed in the first quarter of the year with the value of bets placed rising by around 26 percent to total around 250 million euros. But operating profit plummeted by around 37 percent to 4.6 million euros. Fortuna, majority owned by the Penta group, said one of the main factors was a steeper betting tax in the Czech Republic. The group operates in the Czech, Slovak, Polish, and Hungarian markets.
Study: Companies named after their owners benefit from greater trust
Companies in the Czech Republic named after their owners more easily nurture customer trust, which translates into increased profit, a study by the analytical firm Bisnode suggests. The study examined limited private companies with majority owners and other firms. It suggests that profitability among companies named after the owner was 0.5 percent higher than those with neutral names. Eleven percent of company founders 60 or older name their firm after themselves; while those under the age of 30 who do so are just five percent. Consumers seemed more likely to trust a company where the CEO was unafraid to put his or her name up front, standing fully behind their product, the analysis suggests.
In Business News this week: OKD warns of insolvency declaration; Tatra lands massive order for Egypt and Jordan; Direct Fly plane maker to shift production to China; average apartment prices rising by 6.0 percent; and 1.0 billion Chinese investment in Sokolov car parts plant.
OKD owners warn of insolvency declaration
The Ad Hoc Group, which controls New World Resources, is considering a declaration of insolvency of the hard coal mining company OKD as early as this Friday unless the government steps in to help. A meeting between both sides was scheduled this Monday. Ad Hoc Group took control of NWR in February but on Monday said it would not continue to waive a deadline for seeking debt repayments from the ailing mining firm.
On Sunday, the Ad Hoc Group reportedly offered to sell OKD for less than 150 million euros, the equivalent of less than four billion crowns. Industry and Trade Minister Jan Mládek said the real value of the company was far less and he couldn’t imagine why the government would buy at such a price. OKD currently employs almost 10,000 people, and also provides additional jobs in the sector for suppliers and various other companies.
Tatra to supply chassis for military vehicles to Egypt and Jordan
Truck maker Tatra is to supply chassis for military vehicles to the Egyptian and Jordanian armies in deals worth a total of around 800 million crowns, iHned.cz reported on Tuesday. Tatra director Petr Rusek said the contracts had been agreed on a visit by Industry and Trade Minister Jan Mládek and a Czech delegation to the two states. Tatra, which is based in the Moravian town of Kopřivnice, went bankrupt three years ago. However, after being bought out by two Czech businessmen it saw a profit of nearly 400 million crowns last year.
Direct Fly to launch Chinese production of ultralights
The Czech producer of ultralight aircraft Direct Fly will manufacture their aircraft in China, the company’s co-owner, Ivo Lederer, told the Czech News Agency on Wednesday. Company representatives signed an agreement on transfer of technologies with the Chinese company Wanfeng Aviation. The company will launch large-scale production in China, initially producing about 100 to 150 aircraft a year. The Chinese company will invest about four million crowns into cooperation with the Czech partner.
Czech flat prices on steep rising curve
The average price of apartments in the Czech Republic in 2015 increased by six percent on average year-on-year, according to a survey carried out by Deloitte. The average price per metre was 41,800 crowns. The most expensive apartments were sold in Prague (for 56,400 crowns per metre), while the cheapest apartments could be found in Ústí nad Labem region (for 10,000 crowns per metre). Last year, the overall sales of apartments amounted to 70 billion crowns, which is a 15 percent increase on the previous year.
Chinese company signs 1.0 billion crown investment deal for Sokolov
The Chinese auto and farm machinery producer Shijiazhuang Zhogxing group has signed an agreement with Czech company Czech Industry Group which includes the investment of 1.0 billion crowns in a new plant near the West Bohemian town of Sokolov to make car discs. The Chinese company is one biggest producers of such discs in the world. The new factory is expected to employ 100 initially, eventually rising to 200 people. There is an above average unemployment rate of around 8.6 percent around Sokolov.
22-04-2016 16:09 | Jan Velinger
In Business News this week: Škoda workers to see record pay increase; Prague apartment prices hit record high; mortgages hit all-time low.
Unions at Škoda win 11.5 percent pay increase over two years
Carmaker Škoda has agreed to give its workers a record salary increase of 11.5 percent on average over the next two years, according to trade union leaders. Negotiations between the two sides had previously reached a stalemate and the unions had threatened strike action. The unions calculate that the pay rises will cost the company 2.6 billion crowns. Škoda is the biggest player in the Czech auto industry and last year saw record sales.
Prague apartment prices reach record high
The average price of apartments sold in Prague grew by 8 percent year-on-year in the first quarter of 2016, according to figures compiled by a group of developers cited by the Czech News Agency. The average price per metre in the period from the start of January to the end of March was a record 60,517 crowns, the survey found. The rise has been attributed to a marked decline in supply; the developers said the number of flats offered on the capital’s property market had fallen 20 percent year on year.
Average mortgage rate falls below 2 percent for first time
Average mortgage rates in the Czech Republic have reached a new record low. The figure in March was 1.97 percent, down from 2.02 percent the previous month, according to consultants Fincentrum, who have been monitoring the market since 2003 and do not take into account fixed-rate duration. Fincentrum analyst Josef Rajdl told the Czech News Agency that mortgage rates were likely to fall further. He said anybody with sufficient income seeking a loan of up to 85 percent for a longer fixed-rate period who was not now being offered less than 1.9 percent was “at a bad bank”.
Poll: Two-thirds of Czechs believe too many foreigners working in CR
Two-thirds of Czechs believe that there are too many foreigners working in the Czech Republic, suggests a new opinion poll conducted by the STEM agency. Three in every five respondents expressed the view that foreigners are depriving Czechs of jobs. Though both views prevail, they are down on last year. A similar survey in 2015 indicated that 80 percent of Czechs thought there was an excessive number of foreigners employed in the country and over 70 percent believed incomers took Czechs’ jobs
Ruling parties set to clash over wage increase in public sector
The ruling parties look set to clash over a proposed increase in wages in the public sector next year. The Social Democrats are proposing a 10 percent increase in wages in the health and education sectors and a five percent increase for others in the public sphere. Finance Minister Andrej Babiš told Czech TV he was willing to discuss a 3 percent increase for selected public sector workers. Trade unions in the health sector are demanding a significant increase, saying that the health sector suffers from a crippling shortage of doctors and nurses which is affecting the quality of health care afforded.
© 1996–2015 Český rozhlas
15-04-2016 12:28 | Chris Johnstone
In this week’s Business News: Czech exporters highlight skills shortfall; Moody’s say Czech rating not under threat; hops exports shrivel in drought; Škoda Auto-Volkswagen partnership highlighted as success; and tax proposal on church restitution kicked into long grass.
Czech exporters highlight skills shortages
Moody’s says Czech A1 rating not under threat, sees 2015 growth at 2.5 percent
2015 hops exports slide after drought
Volkswagen takeover of Škoda Auto highlighted as success story
Tax proposal on church restitution payments shunned by government
© 1996–2015 Český rozhlas
08-04-2016 13:50 | Chris Johnstone
In this week’s Business News: breweries set records in 2015; central bank forced to intervene against firming crown in February; exporters say foreign sales boosted by up to 450 billion crowns due to weak crown; trade balance at record surplus in February; and car showrooms see record business in March.
Czech breweries set production record in 2015
Low crown policy costs 17 billion crowns in interventions in February
Exporters say low crown pays off with higher sales
Trade balance at record high in February
Car sales set records in March
In Business News: Statistics office confirms Czech economy grew by 4.3 percent in 2015; CEFC boosts stake in Travel Service to just under 50 percent; Škoda to double its deliveries to China by 2020; CzechTourism: Over 350,000 Chinese visitors expected in 2016; Prague council backs purchase of Bohemians 1905 stadium.
Statistics office confirms Czech economy grew by 4.3 percent in 2015
The Czech economy grew by 4.3 percent in 2015 compared with the previous year, the Czech Statistical Office reported Thursday in news which confirmed its earlier prediction of GDP growth. The office also confirmed its 4.0 percent growth year on year figure for the last quarter. The 2015 growth is the best the Czech economy has achieved over the last eight years. Separate figures showed the average Czech wage last year climbed to 26,787 crowns, a rise of 2.6 percent on 2014.
CEFC boosts stake in Travel Service to just under 50 percent
Chinese company CEFC has boosted its stake in Czech airline operator Travel Service to 49.9 percent, the business daily E15 reported Thursday. Previously, CEFC had a stake of around 10 percent. As well as operating scheduled and regular flights, mainly through the carrier SmartWings, Travel Service also owns a third of the national airlines Czech Airlines (ČSA). The increased Chinese stake should allow SmartWings to boost its offer of scheduled flights according to management.
Škoda to double its deliveries to China by 2020
Czech car producer Škoda Auto wants to double its deliveries to China to over half a million cars by 2020, the company announced in a press release on Wednesday. Last year the Czech carmaker sold 281,700 cars in China. The company also plans to invest over 50 billion crowns into the development of new technologies. Representatives of Volkswagen, Škoda Auto and Chinese SAIC Motor Corporation signed a memorandum on their future cooperation at the Czech-Chinese business forum in Prague on Wednesday. At the moment, the Chinese market represents about one fourth of the company’s worldwide sales.
CzechTourism: Over 350,000 Chinese visitors expected in 2016
Over 350,000 Chinese tourists could visit the Czech Republic in 2016, according to the state agency CzechTourism. Last year the figure was 285,000. Most visitors from China enter this country from another European state. However, the number arriving by air last year reached 50,000, a year-on-year jump of nearly 50 percent that followed the introduction of direct flights between the two countries.
Prague council backs purchase of Bohemians 1905 stadium
Prague City Hall has agreed to buy most of the stadium of top flight football club Bohemians 1905. The council has agreed to pay 121.1 million crowns for the Ďolíček stadium in Prague 10 district with the club chipping in around 7.0 million crowns. Several dozen Bohemians fans turned up at the council meeting to back the purchase from the current owner, the company Bohemians Real. The club, nicknamed the Kangaroos after a famous tour of Australia, had feared they might have to quit the stadium at the end of this season. In the past, various real estate development projects have been mooted for the prime Prague site.
© 1996–2015 Český rozhlas
18-03-2016 13:06 | Chris Johnstone
In this week’s business news: worker and management still far apart on wage rises at Škoda Auto; two Czech power companies but no ČEZ bid for German coal assets; electronic cash registers clear Senate; till ring slower in January; public deficit seen down to 60 billion in 2017.
Škoda Auto unions warn bosses as pay talks reach critical stage
Union leaders at the Czech Republic’s biggest car maker Škoda Auto say they are prepared to take unlimited strike action to push their wage claims for this year. The current collective agreement runs out at the end of March. Management is currently offering a wage hike of 3 percent with the unions demanding 8 percent. Škoda Auto, part of the Volkswagen group, this week announced record profits for 2015. Last year the two sides agreed on a pay rise of 3.5 percent.
ČEZ makes no big for German brown coal assets
Czech electricity producer ČEZ has said that it will not make a binding bid for the German coal mine and power plant assets of the Swedish-based power company Vattenfall. CEZ said that low wholesale electricity prices and uncertainty over whether brown coal power plants might have to be closed early deterred it from making a bid. The state controlled company added though that it was still prepared to talk about other options for the German assets. Separately, Czech Coal said it had made a bid for the assets. Later, Czech energy group EPH said it made a joint bid along with the PPF Investments company.
Senate approves electronic cash registers bill
The Czech upper house, the Senate, has approved on of finance minister Andrej Babiš’ flagship measures aimed at combatting tax avoidance, so-called electronic cash registers. Attempts to amend the proposal or stall debate from members of right-wing parties failed. The controversial move now just needs to be approved by head of state, Miloš Zeman. The minister reckons the measure will curb tax avoidance to the tune of 18 billion crowns a year. Opponents say it adds another burden to small business and will not deliver on the promise of extra tax revenues.
Czech retail sales slip in January
Public deficit seen at 60 billion crowns in 2017
The public finance deficit in 2017 should be 60 billion crowns, Finance Minister Andrej Babiš said in a debate on commercial TV Prima. The minister indicated that meeting that target would not be easy, saying he expected to come under considerable pressure from individual cabinet members. Babis said he was counting on an increase in pensions, more funds for sports and emphasized the need for investment projects which he said would be given priority. The 2015 deficit in public finances was 62.8 billion, which is 37.2 billion less than originally projected.
© 1996–2015 Český rozhlas
11-03-2016 16:29 | Chris Johnstone
In this week’s Business News: public tender bill wins lower house backing; profits from farm sector slump; Škoda Auto sets record February sales; inflation falls back in February; country on wrong tracks for rail corridors
New public tender bill passes first reading
A new on law on holding public tenders was passed in the lower house of parliament at first reading on Wednesday. Among the changes proposed are greater scope for the tender organizer to include other factors in the evaluation rather than just the lowest price. It also allow bidders with a poor past record to be disqualified and sets a 10,000 payment for appeals against tender decisions made to the competition office. The bill was originally supposed to be passed last week but was caught up in a arguments about whether to limit the influence of billionaire businessmen in politics and whether to disqualify them from public tenders. The bill is an attempt to put some order in the conflict over how to frame clear, effective, and fair tender rules. Opponents though says it paves the way for corruption.
Farm sector profits cut by a third in 2015
The Czech agricultural sector last year saw overall profits slide dramatically from the record year of 2014, according to the Czech Statistical Office. Profits for the sector dropped by around 27 percent to around 16.9 billion. The main factor was lower prices for goods, in particular milk and pork but earnings were also affected by the drought over the summer. Overall sales in the sector amounted to 127 billion crowns with crops making up around 75 billion crowns of that. The Agricultural Association, which uses different figures and calculations, says profit more than halved last year to 9 million crowns from 19 billion.
West Europe, China boost for Škoda Auto sales
The country’s biggest car maker Škoda Auto has announced its best ever bruary for worldwide sales. The manufacturer racked up total sales of 78,800 over the month, 3.6 percent more than in 2015. Sales in Western Europe and China were particularly strong. Škoda was also helped by the launch of new models of the top of the range Superb and down range Fabia.
Inflation recedes in February
The rate of year-on-year inflation slowed in February to 0.5 percent from January’s 0.6 percent, according to figures released by the Czech Statistical Office released on Wednesday. One of the main factors for the slowdown were weaker price rises for alcohol and tobacco and more moderate cost increases for utilities and housing. Prices rose 0.1 month-on-month. The inflation figure is well below the target rate of the Czech National Bank of 2.0 percent.
Spending watchdog attacks rail corridor roll-out
The Czech spending watchdog, the National Audit Office, has released a critical report on the progress of renovation and improvements of some of the country’s key rail corridors. The report points out that a series of projects approved in 2001 and 2002 were originally supposed to be completed by 2010 but now look they will not finished until 2021. It added that the costs of one kilometre of new track was sometime three times the expense of the cheapest and that standard cost evaluations were only introduced at the start of 2015. In the remains of that year that move already saved 23.2 billion crowns.
© 1996–2015 Český rozhlas
EUCCAN News Flash
Legal review of CETA completed
Brussels, February 29, 2016 - Canada's Minister of International Trade, Chrystia Freeland, and the European Union's Commissioner for Trade, Cecilia Malmström, announced the completion of the legal review of CETA.
As part of it, Canada and the EU agreed on modifications related to investment protection and investment dispute resolution provisions. The Agreement is currently undergoing translation into French, and the other 21 EU Treaty languages. Following translation, the process required to approve the agreement in Canada and the EU along with the steps necessary to bring policies, regulations and legislation into conformity with the obligations under CETA will begin.
Joint statement: Canada-EU Comprehensive Economic and Trade Agreement (CETA)
CETA: EU and Canada agree on new approach on investment in trade agreement
CETA summary of the final negotiation results
Fact Sheet: Main elements of CETA
GOVERNMENT OF CANADA:
Business News round-up: Česká Spořitelna sees net profit drop in 2015; Škoda Auto has 60 percent brand loyalty says board chairman; Close to 100 Czech construction projects at risk; Conference marks opening of branch of European Investment Bank in Prague.
Česká Spořitelna sees net profit drop in 2015
One of the Czech Republic’s biggest banks, Česká Spořitelna announced a drop in net profits for 2015 of 5.2 percent to 14.3 billion crowns. High provisions for bad loans and low interest rates eroded profits, the bank said. Most of the other big banks on the Czech market have already announced much better results. Česká Spořitelna is regarded as the biggest Czech bank according to the volume of client deposits.
Ombudswoman: Lower minimum wage for disabled pure discrimination
The ombudswoman, Anna Šabatová, has asked the Constitutional Court to overturn a government decree setting a lower minimum wage for people on disability benefits. At present the minimum monthly wage for the disabled is 9,300 crowns, 600 crowns less than for able-bodied employees. Ms. Šabatová described the state’s approach as pure discrimination. She called on labour inspectors not to wait for the verdict of the Constitutional Court but to immediately force employers to create equal conditions for all employees.
Škoda Auto has 60 percent brand loyalty says board chairman
Škoda Auto has more brand loyalty from owners than fellow Volkswagen company Porsche, company board chairman Bernhard Maier said on Thursday. Maier, who joined that biggest Czech car maker in Autumn last year, said that 60 percent of Škoda Auto owners bought the car again compared with 58 percent of Porsche owners. Maier said Škoda will develop more SUV and eco models over the next decade. He confirmed that the first hybrid car to be rolled out will be the top of the model Superb.
Governor of South Moravia: Close to 100 Czech construction projects at risk
A total of 98 transport construction projects in the Czech Republic worth 130 billion crowns in total face problems in drawing EU subsidies, according to the governor of South Moravia Michal Hašek. Previously officials said 64 construction projects worth 90 billion were endangered. The EU requires new Environmental Impact Assessment studies (EIA) for these projects, which will delay their construction and the drawing of EU subsidies. The Czech Republic is negotiating a special regime for the projects in question with the European Commission. In case the talks fail, Hašek has proposed an alternative solution in drawing subsidies for regional rail and road projects for which EIA is not required.
Conference marks opening of branch of European Investment Bank in Prague
An international conference is being held in Prague on Monday in connection with the opening of a branch of the European Investment Bank in the city. Among those due to attend are the bank’s president, Werner Hoyer, the Czech Republic’s European commissioner, Věra Jourová, Czech finance minister, Andrej Babiš, and Miroslav Singer, the governor of the Czech National Bank. The new branch will provide information to public institutions and companies on opportunities to finance projects using funding from the EIB and the European Fund for Strategic Investments.
© 1996–2015 Český rozhlas
Business roundup: Education minister voices support for 10 percent pay increase for teachers; Czech mortgage loans market surges in 2015; Court declares significant manufacturer Motorpal unable to meet debts; around 15 percent of Czech elderly people are faced with poverty.
Education minister voices support for 10 percent pay increase for teachers
Education minister Kateřina Valachová has backed a demand by teaching unions for a hike in wages of 10 percent. Valachová said the increase was large but legitimate given the level of teachers’ pay and the difficulty in finding qualified and motivated staff. The minister said she would begin talks with the minister of finance, Andrej Babiš, about inserting the raise in the budget for 2017 and 2018. The cost of a 10 percent rise would be around 13 billion crowns a year. Average teachers’ wages are currently around 26,000 crowns a month, some of the lowest for university graduates across all professions in the country.
Czech mortgage loans market surges in 2015
The total worth of mortgage loans offered last year came to a record 184 billion crowns, according to figures released by the Ministry for Regional Development. The number of clients taking out loans jumped to around 102,000. The main factor in the booming market was the low average interest rates on mortgages of around 2.14 percent. The mortgage loans total in 2014 came to around 143 billion crowns.
Fifteen percent of elderly facing poverty says survey
Around 15 percent of Czech elderly people are faced with poverty, a survey commissioned by the Czech Statistical Office has reported. It found those living on their own in old age, mostly women, are particularly vulnerable to hardship with around 75,000 elderly people falling into the poverty trap. Poverty is defined as having less than 60 percent of the average monthly income.
Court declares significant manufacturer Motorpal unable to meet debts
Brno regional court has declared the Jihlava-based diesel engine and auto parts producer Motorpal unable to meet its debts. The company is a player on world markets and employs around 1,300 in Jihlava and more at other plants in the Czech Republic. It is a world player on the market for fuel injection systems for diesel engines. A restructuring plan, which was reported to have the backing of most of the banks and companies owed money, was not accepted by the court. Motorpal is reported to owe around 800 million crowns. It’s annual turnover in 2014 was around 1.3 billion crowns.
Gap between amount Prague pays into and draws from EU highest ever last year
Last year the Czech Republic drew nearly 152 billion crowns more from the European Union than it paid into the bloc, according to figures released by the Ministry of Finance on Tuesday. It was the highest such gap since the country joined the EU in May 2004. The Czech Republic drew a total of 157 billion crowns from the union’s Structural and Cohesion Funds, as well as receiving 31 billion crowns under the Common Agricultural Policy. Since its accession the Czech Republic has contributed 429 billion crowns to the EU’s coffers and received 990 billion crowns.
© 1996–2015 Český rozhlas
Business round-up: Czech Republic reaches 21st spot on Economic Freedom Index; European Commission sees Czech growth at 2.3 percent; Municipal court rejects legal complaint against Prague 7 shopping centre and administrative building.
Czech Republic reaches 21st place on Economic Freedom Index
The Czech Republic has jumped three places on the Index of Economic Freedom, reaching the 21st position among the 178 countries included on the list. The country’s economic freedom score for 2015 is 73.2 out of a maximum 100, which is its best score ever. The Index of Economic Freedom was introduced in 1995 by the Heritage Foundation and The Wall Street Journal. According to the assessment, Hong Kong is the most economically free country, while North Korea was placed at the bottom of the ladder.
European Commission sees Czech growth at 2.3 percent in 2016
The European Commission expects Czech economic growth this year to slow down considerable to around 2.3 percent from an expected 4.5 percent in 2015. The latest figures were released in the Commission’s winter economic prognosis. Growth in 2017 is expected to climb slightly to 2.7 percent. One of the factors curbing Czech growth is lower pumping of EU cash at the start of a new funding period.
Municipal court rejects legal complaint against Prague 7 shopping centre and administrative building
The Municipal Court this week rejected a legal complaint by Prague 7 residents who had hoped to block the construction of a shopping and administrative complex on Veletržní Street. The news was released by Václav Matoušek, the head of the firm behind the development project, the British firm Lordship. Permit has been given for construction to begin on lower parking levels of the site but questions remain over the building above ground. The matter is currently being negotiated with the local administration. The local city hall has charged the firm had not met all terms agreed in a contract signed with the previous administration. City Hall has been against the project long-term, as the site was meant to include a memorial and new apartments. The firm had threatened to take the matter to arbitration court but its boss has suggested some headway in talks has been made.
Czech Republic, Iran, hope to cooperate in area of nuclear safety
The Czech Republic and Iran are hoping to cooperate more closely in the area of nuclear safety and a meeting between both countries nuclear energy watchdog authorities is planned for later this year, Deputy Industry and Trade Minister Eduard Muřický said at a seminar on Wednesday discussing possibilities of trade with Iran after the lifting of economic sanctions. Czech State Nuclear Safety Authority chairwoman Dana Drábová confirmed to ČTK that a meeting with Ali Akbar Salehi, the head of Atomic Energy Organization of Iran, is being planned. No definite date has been set. Industry and Trade Minister Jan Mládek issued an invitation to Salehi during his visit to Iran in January. In September last year, Czech Foreign Minister Lubomír Zaorálek visited Iran in the accompaniment of a business mission. Czech business representatives may also find opportunities in Iran in the area of mining of raw materials, the petrochemical industry, engineering and aircraft industry, Deputy Foreign Minister Martin Tlapa said at Wednesday's seminar.
Teachers’ unions call for 10 percent pay rise
The Czech Republic’s teachers’ unions have called for a pay rise for teachers and other employees in the education sector by at least 10 percent by 2017, the head of the Czech and Moravian Trade Union of Workers in Education, František Dobšík, said at a press conference on Tuesday, adding that it should be included among the priorities of the Education Ministry. According to Mr Dobšík, teachers’ starting salary should be raised by at least 2,000 crowns to 23,000. The overall amount allocated to the increase of wages would amount to some eight billion crowns. The unions want to discuss their demands with Finance Minister Andrej Babiš and Prime Minister Bohuslav Sobotka.
© 1996–2015 Český rozhlas
In Business News this week: Ministers clash over aid to car parts plant; economic confidence reaches new heights; new committee to oversee nuclear power development; and EU rules could hold up dozens of road projects;
Czech ministers clash over aid to new car parts plant at Svitavy
Czech Minister of Industry and Trade Jan Mládek and finance minister and ANO leader Andrej Babiš have clashed over a 225 million crown package of incentives for a car parts and components company to expand in the country. The Social Democrat industry minister said on Monday that the aid for the INA Lanškroun firm which would help create around 900 jobs but is being blocked by Babiš. The finance minister has rebutted the claim but accused Mládek of trying to gain extra cash not cleared in his 2016 spending. The aid is focused a package of 2.5 billion crowns in spending on a new plant in Svitavy, which has one of the highest jobless rates in Eastern Bohemia.
Czech economic confidence rises to new heights in January
Confidence in the overall performance of the Czech economy has risen to its highest level since the peak of the last boom in June 2008, the Czech Statistical Office announced on Monday. The office’s composite confidence index advanced by 1.9 percent points in January compared with the previous month. The rise was largely due to more optimism among consumers but producers’ sentiment is also at its strongest level for the last five years, the office said.
Czech government sends signal over nuclear power
The Czech government has cleared the creation of a new committee to coordinate the development of nuclear power in the country as well as the position of a nuclear “envoy” appointed as the main point person for developments in the sector on Monday. Minister for Industry and Trade Jan Mládek said in a press conference after the government meeting that the moves sent the “right signal” that the Czech Republic is committed to nuclear power and in particular to fulfill the Development Plan for Nuclear Energy adopted by the government in June last year. As well as piloting the construction of new nuclear reactors, the envoy and committee should also oversee national plans for a long-term storage site for nuclear waste; the national nuclear supply chain for the industry; international nuclear cooperation; and safeguarding Czech nuclear power know-how.
Czech grown medicinal cannabis to be delivered in February
Czech medicinal cannabis producer Elkoplast Slušovice says it will deliver its first consignment of locally grown and produced product in the second half of February. Three similar consignments of 10 kilogrammes should follow by the end of this year. The Czech company signed a contract to supply cannabis to the state drugs authority last year. Use of medicinal cannabis is legal in the country since April 2013. Some local critics say medicinal cannabis is still difficult to find in pharmacies and the price is too high.
EU rules could delay 64 road construction projects, says PM
Dozens of road construction projects in the Czech Republic could be held up due to European Union regulations, Prime Minister Bohuslav Sobotka said after a meeting of economic ministers on Tuesday. Sixty-four construction projects are concerned; they have been in the process of acquiring authorization for so long – up to 15 years – that they are required by EU law to get fresh environmental impact assessments. Mr. Sobotka said this process could take years and could impact efforts to draw CZK 90 billion from EU funds.
Competition office starts examination of Brno fair company
The Czech competition office has started to probe the takeover by Brno City Council of the company behind most of the city’s international trade fairs, Veletrhy Brno. The city council last year bought a 61 percent stake in the fairs company from a Dusseldorf company for 224 million euros. The German company has been running the Brno fairs site and events for 17 years. Brno is particularly noted for its annual engineering and farm technology fairs.
Banking association lowers growth expectations for 2016
The Czech Banking Association has revised slightly down its economic growth prediction for this year to 2.4 percent from November’s 2.5 percent. It has, however, upped its forecast for 2015 to 4.2 percent. The association sees growth in 2017 rising to 2.7 percent. Inflation, however, will only rise to something near the level of the central bank’s expectations in 2017 when it is expected to average around 2.2 percent.
© 1996–2015 Český rozhlas
In Business News this week: Regulator to consult public on shake up of electricity charges; Betting company Synot cuts backing for Czech sports; Nuclear fuel supply contract being prepared for Temelín; Czech advertising market climbs in 2015; Škoda: Czech car sales to increase by five percent this year.
Regulator to consult public on shake up of electricity charges
The Czech energy regulatory office on Thursday unveiled that it will be undertaking a near year-long consultation on a proposed shake up of electricity distribution tariffs in the country. The consultation is aimed primarily at getting feedback from households and small consumers. An original study prepared for the shake up proposed an increase of up to 90 percent for the many Czechs having country homes. This has been pared back to around 45 percent but is still likely to spark an angry reaction from around half of the Czech population who have such country retreats. The shake-up has been sparked by wider changes in the electricity market such as a sharp increase in renewable and local power production and the need to re-balance the charges burden for the network.
Betting company Synot cuts backing for Czech sports
Czech-based betting company Synot announced Thursday that it is ending its sponsorship of the top Czech football league. It will also terminate its sponsorship of first league clubs Sparta Prague, Jablonec, and the Nymburk basketball club as well as its wider support for the Czech Sporting Union. Synot said its move was prompted by changes in betting legislation which will cost it hundreds of millions of crowns. It would not be possible to support its Czech activities with earnings from foreign operations it added. Synot said it would continue supporting sport in other countries which provided an environment for activities to prosper.
Nuclear fuel supply contract being prepared for Temelín
State-controlled power company ČEZ has confirmed that it will prepare this year a tender for nuclear fuel supply for its Temelín nuclear power plant. The tender could be held at the latest by mid-2017. The current contract is held by the Russian supplier TVEL, which has raised concerns in some quarters over Czech energy security. US supplier Westinghouse at one stage supplied fuel for Temelin and has in the past said it would like to be in the running again.
Czech advertising market climbs in 2015
The overall Czech advertising market climbed last year by around 8 percent to 65 billion crowns according to figures released by the agency Nielsen Admosphere. Television grabbed the biggest slice of the market with revenues rising to 35.5 billion crowns. Radio ad income rose by around 5 percent to 6.0 billion but revenues for newspapers and magazines were flat at just short of 18 billion crowns. There was no separate breakdown for internet ad income.
Škoda: Czech car sales to increase by five percent this year
Sales of new passenger cars on the Czech market are expected to rise this year by about five percent, the head of Škoda Luboš Vlček said on Wednesday. Sales could reach 220,000 to 240,000 cars compared to last year’s 230,000. Estimates of the international consultants PricewaterhouseCoopers are more optimistic, putting the growth at 10 to 15 percent. Last year, local car sales were up by 20 percent with Škoda taking around a third of the local market for new car sales.
© 1996–2015 Český rozhlas
15-01-2016 14:10 | Ruth Fraňková
In Business News This Week: Brussels seeking return of 810 million crowns handed out to Czech farmers; Economic growth in 3Q 2015 better than previously thought; Ministers meet over future of OKD mining company; Czech trade mission headed by minister flies to Tehran; Fischer boosts tourists, turnover, and profits.
Brussels seeking return of CZK 810 million handed out to Czech farmers
The European Commission is seeking the return of CZK 810 million from the Czech Republic due to oversights in the allocation of subsidies between 2010 and 2013, the minister of agriculture, Marian Jurečka, said on Tuesday. The money has already been paid out to Czech farmers and they would not be required to send it back, the minister said. EU auditors said that Czech inspectors had failed to check whether farmers had up-to-date livestock registers and had carried out other procedures.
Economic growth in 3Q 2015 better than previously thought
The Czech economy grew more quickly in the third quarter of last year than a previous estimate had suggested. Gross domestic product expanded by 4.7 percent not 4.5 percent between the start of July and the end of September, according to revised figures released on Tuesday. Only five other OECD members saw faster growth in the third quarter of 2015.
Ministers meet over future of OKD mining company
Government ministers met Thursday with managers of the struggling mining company OKD. Minister of Industry and Trade, Jan Mládek, said after the meeting that it had been agreed that any fundamental steps agreed by company management would have to be approved as well by the company’s creditors. He added that ongoing negotiations would focus on a possible restructuring plan for the company and the sale of the Frenstat mine to the state. Coal at that mine has not been exploited yet. The future of the OKD mines are threatened by low coking coal prices with around 13,000 immediate jobs at stake.
Czech trade mission headed by minister flies to Tehran
Czech Minister of Industry and Trade Jan Mládek flies out to Tehran Friday accompanied by a 60-strong business delegation to Iran. The minister starts a four day working visit which includes the opening of a Czech Trade office in the Iranian capital. Iran is the target for many worldwide trade delegations with numerous export opportunities as the decades of business isolation and embargoes appear to be coming to an end.
Fischer boosts tourists, turnover, and profits
Czech tour operator Fischer last year achieved a record turnover of around 4.0 billion crowns, around a fifth higher than in 2014. The final profit rose to 145 million crowns with the number of clients climbing to 300,000 from 266,000. The tour operator said that it has increased its offer of winter and summer destinations.
© 1996–2015 Český rozhlas
08-01-2016 15:53 | Jan Velinger
In this week’s Business News roundup: Car production in Czech Republic reaches all-time record in 2015; Finance minister wants bill on electronic registers approved in January; Czech nuclear plants see significant production drop; President slams government for failure to draw 35 billion crowns; Česká rafinérská reaches deal with Mero ČR on shipping and storage of crude.
Car production in Czech Republic reached all-time record in 2015
Car production in the Czech Republic grew by 4.5 percent last year, reaching an all-time record for the year. Close to 1.3 million cars were manufactured in the country in 2015, which is about 50,000 more than in the previous year, the head of the Czech Automotive Industry Association, Antonín Šípek, announced on Thursday. Bus production grew by 30 percent last year, reaching a record of 4,200 vehicles. Škoda Auto remained the biggest car producer with nearly 700,000 cars, followed by Toyota, Peugeot, and Citroen plant, which recorded the biggest year-on-year growth of 9.7 percent.
Finance minister wants bill on electronic registers approved in January
Finance Minister Andrej Babiš has said he wants the bill on electronic registers approved by Parliament by the end of January. The finance minister said the coalition government would do everything in its power to see this come about, even if it had to use its majority in the lower house to end the protracted debate on the bill and call a vote. The three ruling parties have enough votes to see the bill through. Meanwhile, the opposition right wing parties which have used filibustering tactics to block the bill for months threaten to take the matter to the Constitutional Court if the coalition enforces a vote.
Internet retailers recorded record turnover in 2015
The turnover of Czech internet retailers in 2015 rose by 20 percent year-on year to a record amount of 25 billion crowns, the Association for Electronic Commerce announced on Thursday. This year, domestic e-commerce turnover is expected to grow at least by another 15 percent, reaching 100 billion crowns. According to the head of APEK, Jan Vetyška, the Christmas season contributed to nearly a third of the overall sales. Consumer electronics, mobile phones, toys and clothing were traditionally among the best-selling goods.
Czech nuclear plants see significant production drop in 2015
Czech energy giant ČEZ announced on Monday a sharp drop in electricity production from its two nuclear plants, Dukovany and Temelín, in 2015. The total net production from the two plants last year came to 26.83 TWh compared with around 30.32 TWh a year earlier. The biggest production drop came from Dukovany, where 2015 power production reached 12.60 TWh, around 2.77 TWh down on the 2014 output figure of 15.37 TWh. Three out of the four Dukovany units were closed from mid-September when flaws in X-ray safety checks on pipes by a sub-contractor were revealed.
President slams government for failure to draw 35 billion crowns in EU funds
In his interview for Czech Radio Plus on Monday, President Zeman criticized the government for failing to draw around 35 billion crowns in EU funds. He suggested the failure to draw the money was the result of laxness and incompetence. Originally, before corrective measures were taken, the country stood to lose up to one hundred billion. The president maintained that ‘even’ 35 billion crowns was an enormous amount. Over the period of 2007 to 2013, the Czech Republic had at its disposal the equivalent of 800 billion crowns from EU funds.
Česká rafinérská reaches deal with Mero on shipping and storage of crude
Crude oil processing company Česká rafinérská, owned by petrochemical holding Unipetrol, has reached a deal on the shipping and storage of crude with state owned Mero ČR. The move was confirmed by Mero spokesman Mikuláš Duda. The new contract is valid as of January 1, 2016. Mero is the owner and operator of the Czech section of the Družba crude oil pipeline and the IKL crude oil pipeline and is the only transporter of crude oil into the Czech Republic. Unipetrol CEO Marek Świtajewski said on Monday that the open-ended contract was the result of extensive negotiations which began in 2010.
© 1996–2015 Český rozhlas
Imminent major change to VAT system will affect over 500,000 payers
23-12-2015 13:44 | Ian Willoughby
The biggest changes in the value-added tax system since its introduction in the Czech Republic in 1993 will come into effect in two weeks’ time after the minister of finance, Andrej Babiš, succeeded in definitively pushing the move through on Tuesday.
Companies and the self-employed will have to supply the state with far more information than at present under the new rules, the newspaper Hospodářské noviny reported. One of them will require around 550,000 VAT payers to file their tax returns by February 25.
Tax returns may now only be submitted in electronic form, perhaps posing a challenge to the 150,000 small firms and individuals who filed theirs on paper this year.
Martin Diviš, an expert on indirect tax at consultants PwC, told Hospodářské noviny that electronic-only tax returns were a step in the right direction and a logical trend. Practically everybody has an internet connection today so it shouldn’t cause anybody any problems, he said.
The most attention-grabbing aspect of the new system is the fact that VAT payers will be required to send tax officials a regular overview of all invoices or other non-cash documents that they have received or issued in the previous month.
This change – going by the term “inspection reports” – will provide the state with a huge volume of sensitive data on all Czech companies. For instance, it will make clear which other businesses a particular firm is involved with.
Unusually for tax legislation, which tends to be pushed through at the last minute by Czech legislators, the “inspection reports” were rubberstamped a year in advance.
Hospodářské noviny writes that the requirement has been rather overshadowed by the debate surrounding electronic cash registers – despite the fact the former will have a greater impact on those in business.
The right-wing parties the Civic Democrats and TOP 09 have called for the change to be delayed for a further 12 months to allow people to prepare. They say also that it had been linked to a bill on electronic cash registers that was rejected.
However, according to the head of the Financial Administration, Martin Janeček, the measure has been in the law for a year. It is therefore untrue that the public were unable to prepare for it, he said.
Government officials say the new measure will prevent large-scale VAT fraud. Mr Janeček’s agency estimates that up to CZK 80 billion is unpaid every year.
The monthly filing of invoices will make the Financial Authority’s work easier and allow it to uncover fraud more effectively. Special software will look for discrepancies between issued and received invoices.
Some companies fear the leak of sensitive data. But Mr. Janeček told Hospodářské noviny says the information supplied will reveal no more than that company A has done a transaction with company B. The fact firms do business together is already quite publicly known, he argued.
© 1996–2015 Český rozhlas
In Business News: Farmers estimate losses at 2.6 billion crowns; International centre to explore medical use of cannabis; Amazon plans new centre on edge of Prague; Arms manufacturer Česká Zbrojovka signs agreement with Slovak Interior Ministry; Central bank upholds weak crown policy.
Czech farmers estimate losses caused by drought at 2.6 billion crowns
Czech farmers estimate the damages caused by this year’s drought at 2.6 billion crowns, the president of the Agrarian Chamber, Miroslav Toman, told the Czech News Agency on Thursday. He also said that the Agriculture Ministry has prepared a financial injection of 600 million crowns that will be distributed among the farmers hit by the hottest and driest year on record. The harvest of corn, beet root, and potatoes, took the biggest hit, but fruits and vegetables and hops were also affected. The government’s national strategy in coping with drought should be concluded by 2016.
International centre to explore medical use of cannabis opens in Prague
A center for research into the use of cannabis in medicine has been opened in Prague. The International Centre for Cannabis and Cannabinoids Institute has been created with the help of 500 million crown donations from the US and Canada. Health minister Svatopluk Němeček said the sum represents the biggest foreign investment in Czech medicine in recent years. The centre has been tasked to explore the use of cannabis and its components both with regard to existing medical knowledge and the experiences of patients. Although legal for some conditions, Czech doctors are said to be still cautious about prescribing medicinal cannabis.
Amazon envisages new centre on edge of Prague
US-based Amazon is proposing to locate its European centre for returned goods on a site on the outskirts of Prague. The site earmarked for the giant hall is at Horní Pocernice with the possibility of 3,000 workers on the site. Around 1,000 workers could be located from Amazon’s existing site at Dobrovíz, which would remain as a logistics centre for the e-commerce giant.
Česká Zbrojovka to provide guns to Slovak armed forces
The arms and military equipment producer Česká Zbrojovka has signed an agreement with the Slovak Interior Ministry to provide the country’s police and other armed forces with over 26,000 guns. Interior Minister Robert Kaliňák announced the news at a press conference on Thursday. The Slovak Interior Ministry is set to pay 383 million crowns (over 14 million Euro) for the items. Česká Zbrojovka has won the tender, the biggest of its kind in Slovakia’s history, together with the Austrian company Glock. The first dispatch of guns should be delivered to Slovakia at the start of next year.
Central bank upholds weak crown policy
The Czech National Bank board on Wednesday confirmed its commitment to intervene on foreign exchange markets until the end of 2016 in order to weaken the crown and maintain an exchange rate of CZK 27/EUR. The board also agreed to keep interest rates, now at a historic low, unchanged. The two-week repo rate will be maintained at 0.05%, the discount rate at 0.05% and the Lombard rate at 0.25%.
© 1996–2015 Český rozhlas
In Busines News this week: The lower house approves 2016 budget; Inflation falls to 0.1 percent in November; Industrial production speeds up in October; October trade balance climbs to 13.3 billion crowns; Energy Regulatory Office not to pay out support for renewable sources; Prague-Shanghai air link to launch in April.
The lower house approves 2016 budget
The lower house of Czech parliament approved the draft of the 2016 state budget in its final reading on Wednesday. The proposal envisages expenditures of 1.251 trillion crowns and revenues of 1.181 trillion, creating a deficit of 70 billion crowns, i.e. 30 billion lower that this year’s. The lower house has also transferred more funds to be spent on social services, education and sport. The 2016 budget will have to be signed into law by the president.
Inflation falls to 0.1 percent in November
Year-on-year inflation in November fell to 0.1 percent from October’s figure of 0.2 percent, according to figures released on Wednesday by the Czech Statistics Office. Last month’s year-on-year rise in consumer prices is the lowest since February, contrary to the expectations of analysists, who predicted a year-on-year inflation rise of 0.4 percent. Compared to October, prices dropped by 0.4 percent, which was the highest month-on-month decline since September 2013. The slowdown of inflation was caused mainly by the fall in prices of foodstuffs, spirits and fuel.
Industrial production speeds up in October
Industrial production in October climbed by 3.8 percent compared with the same month in 2014. When adjusted for the number of working days, the output increase stood at 6.4 percent. The value of new orders over the month climbed by 6.5 percent. The main factor fuelling the output increase was higher production of cars but production of electricity and chemicals fell back sharply.
October trade balance climbs to 13.3 billion crowns
The Czech trade balance for October ended with a surplus of 13.3 billion crowns, according to figures released Monday by the Czech Statistical Office. That is an advance of 1.2 billion crowns on the figure for the same month in 2014. The surplus, however, could take a major dent of 9.9 billion crowns if a new deal for the Czech army to rent Gripen jet fighter planes is taken into account. The trade balance so far this year shows a surplus of almost 138 billion crowns, that is almost 4 billion crowns more than in the first 10 months of 2014.
Energy Regulatory Office not to pay out support for renewable sources
The Czech Energy Regulatory Office (ERU) will not pay out support for renewable sources of energy next year unless it is approved by the European Commission, ERU chairwoman Alena Vitásková told Czech Television. According to Vitásková, only about 7 percent of domestic renewable sources have received approval from the EC. The Czech Republic pays out about Kc45bn annually in support of renewable sources. One of the reasons why most renewable energy producers have not received approval from the EC is that they allegedly receive excessive support from the state. Vitásková´s position was criticised by the Industry and Trade Ministry, the Czech Photovoltaic Industry Association and the Alliance for Energy Self-sufficiency.
Prague-Shanghai air link to launch in April
A direct airline link between Prague and Shanghai should be launched by China Eastern Airlines on April 2 of next year, a spokeswoman for Prague airport’s operator announced. The flights should take place three times a week. Direct flights to Beijing were launched at the end of September this year by Hainan Airlines. The start of flights to Shanghai isregarded as further proof of the Czech Republic’s stepped-up business and economic links with China.
© 1996–2015 Český rozhlas
In Business News: The average monthly salary jumps by almost 950 crowns; police investigate solar power corruption; Czech lawmakers will challenge VAT proposal; Czech oligarchs seek to buy up Mladá Fronta publishing house.
Average monthly salary reaches 26,072 crowns
The average monthly salary in the Czech Republic in the third quarter of 2015 rose by 944 crowns, compared to the same period last year, according to the figures released by the Czech Statistical Office on Friday. Accounting for inflation, real growth was 3.4 percent. The average monthly pay is currently 26,072 crowns (around 960 euros). The results exceeded expectations of analysts, who anticipated a wage hike of up to three percent.
Police investigate solar power corruption case
The Czech anti-corruption police squad is investigating several people connected to the country’s third largest solar power plant, Ševětín, in south Bohemia, the website lidovky.cz reported on Thursday. Two top-managers from Czech energy group ČEZ are reported to have been questioned following a raid on their offices. A spokesman for the anti-corruption unit said no-one was arrested or charged, but refused to provide any further information. The ČEZ-owned power plant, which was put into operation in 2010 under a generous government renewable energy support, has aroused suspicions of corruption in the past.
Czech lawmakers to challenge VAT proposal in Constitutional Court
A group of 21 members of the Czech upper house, the Senate, said Wednesday that they would challenge moves to clamp down on Value Added Tax fraud in the Constitutional Court. They say that the moves which should take effect next year are in conflict with data protection and collection rules. The Ministry of Finance says it is convinced the changes are in order.
Politicians to discuss Dukovany shutdown in coalition council
Government political parties are to discuss the ongoing shutdowns and past safety failures at the Dukovany nuclear power plant next week. Minister of Industry and Trade, Jan Mládek, said a meeting of the coalition council will discuss the shutdown of three out of four of the reactor units since October. The closures have been caused by flawed past X-ray safety checks on reactor pipes by a sub-contracting firm.
Czech oligarchs seek to buy up Mladá Fronta publishing house
The publishing house controlled by Czech billionaires Daniel Křetínský and Patrik Tkáč has confirmed that it is seeking to buy up part of the Mladá Fronta newspaper and magazine group. Preliminary clearance from the Czech competition office has been sought for the deal. Mladá Fronta, which has no connection to the daily newspaper, is one of the biggest publishing houses in the country with the business daily E15 part of its stable. Křetínský and Tkáč already own the company publishing the best selling tabloid Blesk and the daily Sport.
© 1996–2015 Český rozhlas
In Business News this week: Lower house seeks up to 44 billion crowns for 2016 budget; Electricity prices to remain unchanged in 2016; Farmers and local councils threatened by refusal to pay power support says ministry; Country’s largest insurer agrees on 2016 plan; Electronic motorway payments to be phased in within three years: ministry.
Lower house seeks up to 44 billion crowns for 2016 budget
Members of the lower house of parliament proposed additional spending in the 2016 budget totalling up to 44 billion crowns on Wednesday as they debated next year’s spending package. Most of the extra spending was focused on the army, border protection, education, and social services. Finance Minister Andrej Babiš said he would address the new demands in the final third reading. He added though that many ministries are currently now able to spend all the funds they are already allocated. The Ministry of Defence has been earmarked 50 billion crowns this year but appears on course to spend just 34 billion, he added.
Electricity prices to remain unchanged in 2016
The price of electricity for end clients will stay roughly the same in 2016 as this year, while the price of gas will drop by one to two percent, the Energy Regulatory Office announced on Thursday. The office raised the regulated part of the electricity price, which is comprised mainly of the fee for transmission and distribution and a contribution to renewable energy sources, but said the growth would be compensated for by a drop in electricity prices on the market. The regulated part accounts for over 50 percent of the end price of electricity; the price of baseload electricity is set by the suppliers. The regulated part of gas price currently accounts for one quarter of the final price, but its size is expected to drop by some 3 to 5 percent next year.
Farmers and local councils threatened by refusal to pay power support says ministry
The Czech Ministry of Industry and Trade warned Monday that farmers and local councils could be hard hit if a stand-off with the country’s energy regulator over support payments for 2016 continues. The ministry pointed out that around a third of the state support which threatens to be blocked is earmarked for bio-gas facilities which have been constructed by farmers and many local Czech councils. Since loans were taken out on many of the projects, the situation is even graver, the ministry added. The energy regulator is refusing to sign off on around 40 billion crowns of support for 2016 because it says the aid has not been cleared by the European Commission.
Country’s largest insurer agrees on 2016 plan
The executive council of the country’s largest insurance company VZP agreed on its health insurance plan for 2016, the board’s chairman Jiři Běhounek announced on Monday. The insurer, he said, would provide 152.8 billion crowns for health care in 2016, a rise of four percent year-on-year, for almost six million clients. For the second straight year the company fill reserve funds; the insurer is also counting on rising costs in treatment. The firm will now send the proposal to the Health Ministry. It will have to be approved by the government and later in Parliament.
Electronic motorway payments to be phased in within three years: ministry
The Ministry of Transport says that it will make the transition from paper to electronic motorway tolls within three years. A similar electronic system will already be up and running in Slovakia next year. The ministry says that the new system will allow it to clamp down on counterfeit motorway stickers, a problem that was particularly evident at the start of 2015. Prices for year-long stickers will be the same next year as this at 1500 crowns.
© 1996–2015 Český rozhlas
In Business News this week: Czech currency in circulation exceeds 500 billion mark for first time; Spending watchdog finds 2.2 billion in irregular spending at defense ministry; Škoda Auto to raise prices of most popular models; New stretch of Prague metro’s A line to get mobile phone signal; Ruling on late train delivery could lead to ticket price hike.
Czech currency in circulation exceeds 500 billion mark for first time
The value of bank notes and coins in circulation in the Czech Republic has for the first time exceeded the 500 billion crown mark, the Czech National Bank announced on Monday. The total is made up of of more than 2 billion individual notes and coins in circulation, the most popular being the 1,000 crown note and, at the other end of the value chain, the one crown piece.
Spending watchdog finds 2.2 billion in irregular spending at defense ministry
The state spending watchdog, the National Audit Office, has highlighted spending irregularities at parts of the Ministry of Defence. Altogether it found irregularities of around 2.2 billion crowns in the period from 2009 to 2014. The worst were in the ministry’s arrangements for security at its munitions stores where contracts were awarded to one company without a tender and irregularities amount to 2 billion crowns. Other problems were found in purchasing of food, without regard to the number needing to be fed, and provision of accommodation.
Škoda Auto to raise prices of most popular models
Czech car maker Škoda Auto has raised prices of its most popular cars on the Czech market, the website aktualne.cz reported on Thursday. According to the company, prices were increased due to inflation. They also said the price hike will be compensated by an improvement in the basic equipment offered on models. As of next week, the price for a Škoda Superb will increase by 15,000 crowns and the price for an Octavia by 5,000 crowns. The price of a Fabia currently starts at 239,000 crowns and the top of the range Superb at 614,000 crowns.
New stretch of Prague metro’s A line to get mobile phone signal
Three mobile phone operators have signed a contract with the Prague transport authority on providing a signal along the new stretch of Prague metro’s A line. The pilot project should give passengers the luxury of making calls and using LTE internet along the entire length of the recently opened stretch of the line linking the stations Bořislavka, Veleslavín, Petřiny and Motol Hospital. Work on wiring up the tunnels has been underway since the contract between T-mobile, Vodafone, 02 and Prague City Transport was signed at the end of June and should be concluded by the end of the year.
Ruling on late train delivery could lead to ticket price hike
If an appeal against an arbitration ruling under which Czech Railways must pay CZK 1.2 billion to Škoda Transportation proves unsuccessful the price of train tickets in the Czech Republic could go up, the Minister of Transport, Dan Ťok, has warned. Czech Railways had been seeking close to a CZK 1 billion from the engineering company over the late delivery of nearly two dozen of Škoda Transportation’s 380 line locomotives. However after years of deliberation (the original deal was done in 2004), the court of arbitration attached to the country’s economic and agricultural chambers found in favour of Škoda Transportation in a verdict that one news site said meant that Czech Railways now had the most expensive trains in the world.
© 1996–2015 Český rozhlas
Business round-up this week: Government agrees on early retirement package for miners; Health minister declares new victory in Diag Human arbitration battle; Finance minister says environment clean up can be done for half previous price; ČEZ reports fall in profits, rise in revenues, Czech Telecommunications Infrastructure new sponsor of Prague Spring festival.
Government agrees on early retirement package for miners
The country’s miners will be allowed to retire five years earlier than the rest of the working population the government agreed at its cabinet meeting on Monday. The plan was put forward by the Ministry for Labour & Social Affairs; if passed into law, it would mean miners would be able to retire at the age of 58. The ministry tabulates that the total cost of the early retirement package will be an estimated 11.6 billion crowns until 2055 – the estimated expiry date for brown coal mines in the country.
Health minister declares new victory in Diag Human arbitration battle
The Czech Republic has won another round in its international arbitration battle with the blood products company Diag Human. A court in Amsterdam backed earlier rulings that the country was not liable to pay more than 8 billion crowns in damages to the blood products company. That some was set in a 2008 ruling of the alleged damages to the company when the Czech Republic withdrew from an earlier agreement. The latest success was announced Thursday by Minister of Health Svatopluk Němeček
Finance minister says environment clean up can be done for half previous price
Minister of Finance Andrej Babiš said Thursday that his ministry can now arrange for the clear up of long running environmental problems in the country for around half the costs of a tender run by the previous centre-right coalition government. Babiš said the clean-up should cost 25-30 billion crowns compared with the 57 billion offered to underrate the work under the previous government headed by former prime minister Petr Nečas. The clean-up should cover chemicals at the Neratovice site in Central Bohemia, the famous oil and chemical lagoon in Ostrava, and other environmental damage centred around Ústí nad Labem.
CEZ reports fall in profits, rise in revenues, in first three-quarters
The Czech energy giant CEZ has reported a net profit of CZK 16.6 billion for the first nine months of this year, a fall of CZK 3 billion on the same period in 2014. Meanwhile, CEZ’s revenues increased by CZK 3.5 billion to CZK 150.6 billion in the first three quarters, according to a press release issued by the semi-state company on Tuesday. The main causes of the fall in profits were a drop in electricity prices and lower output.
Czech Telecommunications Infrastructure new sponsor of Prague Spring festival
The company Czech Telecommunications Infrastructure, owned by the richest Czech Petr Kellner, has become the new general sponsor of the Prague Spring international music festival, the head of the festival, Roman Bělor, said on Wednesday. The Česká Spořitelna bank, which had been sponsoring the Prague Spring festival since 2001, stepped down from its sponsorship in April this year. The budget for this year’s 70th edition of the festival amounted to over 80 million crowns.
© 1996–2015 Český rozhlas
In Business News: the unemployment rate drops to 4.9 percent, lower house backs hike in gambling charges, new car sales continue to surge, Czech Republic seeks to recruit qualified Ukrainians and shadow economy makes up 15 percent of Czech GDP.
Czech unemployment rate drops to 4.9 percent in third quarter
The unemployment rate in the Czech Republic has dropped to 4.9 percent and is the lowest since 2008, according to data released by the Czech Statistics Office. In the third quarter labour offices registered just over 257,000 unemployed, down by 55,000 compared to the same period last year. According to analysts the figures confirm the revitalization of the Czech economy which is in its best shape since the global crisis.
Lower house committee backs hike in gambling charges
The lower house of parliament’s budget committee on Wednesday gave overwhelming support to a government proposal to hike taxes on gambling. The government proposal counts on betting taxes climbing from the current 20 percent to 23 or 28 percent. Daily taxes on slot machines should also rise by around a third. The combined measures should bring in an extra 2 billion crowns. Parliament should vote on the proposed measure by the end of this month.
New car sales continue to surge in October
New car sales in the Czech Republic are continuing to surge. Sales in the first 10 months of the year ending October are up just over 19 percent compared with the same period in 2014. Total sales stand at just over 191,000. The Škoda Octavia is the most popular single model counting for around one car in 10. Manufacturer Škoda Auto has around a third of the total new car market in the Czech Republic followed by Volkswagen with just over a fifth.
Czechs seek to recruit qualified Ukrainians with fast track visas
Speeded up and simpler visa procedures will be offered in November to Ukrainians who may be able to work as IT specialists or expert technicians in other fields. The speeded up blue cards will be launched as a pilot project for up to 500 Ukrainian university and high school graduates who can fill immediate vacancies.
Shadow economy makes up 15 percent of Czech GDP
The shadow economy makes up 15 percent of the Czech GDP, according to data released by the Czech Statistics Office. Transactions to the tune of 614 billion crowns annually go untaxed. In addition to large-scale VAT evasion this concerns undeclared income from smaller transactions in cash for services provided. According to the Centre for Economic and Market Analyses the overall sum lost to state revenues could help create 1.5 million new jobs.
© 1996–2015 Český rozhlas
In Business News: the central bank board is likely to extend forex interventions into 2017, the EC rejects a bid for extension of VAT reverse charge mechanism, a Czech firm is rated fastest growing technology company in Central and Eastern Europe, the logistics company Geis CZ is planning to build a new transhipment point in Prague and Millionaire Gallery opens a Prague branch.
Analysts predict forex interventions will be extended to 2017
Analysts are predicting that the central bank board will decide to extend forex interventions until 2017 at its upcoming meeting on November 5th, the ctk news agency reported Friday. Analysts cited by the news agency say that in its November forecast the bank is likely to predict a slower inflation growth which has been the main factor behind its intervention policy to keep the crown weak against the euro. In earlier statements the central bank said interventions might end in mid-2016. Interest rates are expected to remain at an all-time low.
EC rejects Czech application for extension of VAT reverse charge mechanism
The European Commission has rejected a bid by four EU member states including the Czech Republic for an exception allowing a broader application of the reverse charge in order to prevent tax evasions. Czech Minister of Finance Andrej Babiš, who has long been pushing for EU member states to be able to decide for themselves what goods and services will be subject to reverse charge, said he was disappointed by the outcome. According to the Ministry of Finance, the Czech Republic was ready to test the possibility of a broader application of the method with help of a pilot project similar to the one prepared by the European Commission in 2008.
Czech firm rated fastest growing technology company in Central and Eastern Europe
A Czech company has been rated by Deloitte as the fastest growing technology company in Central and Eastern Europe. The software company Simplity got top ranking on the Technology Fast 50 list followed by the mobile payments company Skycash Poland and last year’s overall leader, Hungarian online real estate business Szallas.hu. Interestingly, Simplity was sixth in last year’s Rising Star category, when it was still too young to feature in the Fast 50 ranking itself. Four other Czech firms made it into the first fifty.
Geis CZ to build central transhipment point in Prague
Logistics company Geis CZ is planning to build a new transhipment point in Prague in the first quarter of 2016. According to the company’s marketing department it also plans a substantial investment into the sorting technology in the new transhipment facility. Geis CZ reported revenues from the sale of its own products and services totalling 2.06 billion crowns in 2014.
Millionaire Gallery opens in Prague
The Millionaire Gallery, which sells celebrity memorabilia, this week opened a branch in Prague, the fifth in the world, after Miami, Key West, London and Dubai, the ctk news agency reported. According to the head of the Czech branch collectors and investors will be offered a minimum of 60 items at a time. Besides, customers can order artefacts from the depository in Miami or have new memorabilia tailored on request. The items now on display include a collection of photographs with the signatures of all the actors who ever played James Bond and a collection of grand slam titles won by golf champion Tiger Woods. The most expensive item on offer is the prototype of Steve Job's first keyboard, priced at one million crowns.
© 1996–2015 Český rozhlas
Otto Jelinek, Part 2: Success in business and politics and return to Prague
Prague-born Otto Jelinek became Canada’s ambassador to the Czech Republic in 2013, six and a half decades after his family moved to the North American state from communist Czechoslovakia. After becoming figure skating world champion in his early 20s, Mr. Jelinek was also successful in his next venture as a skating goods manufacturer. That was followed by a political career with the Progress Conservative party that included a string of ministerial positions.
In the second half of this two-part interview, I asked Canada’s envoy to Prague whether – being the son of a wealthy industrialist – business had been in his genes.
“Yes, it was. My whole family is business oriented. We grew up in a business-oriented environment, so it was a natural for me to go into business.
“Clearly with the name being known in Canada it was easier to sell skates than anything else.
“I started a manufacturing business, manufacturing skates both hockey and figure skating. Then I added other lines to that and built up a nice business.”
You later became an MP and eventually held several ministerial posts. What drew you into politics?
“I never planned to go into politics. But as I was running my business, and because of the fact that Canadians knew my name quite well from my having the World Championships, I got to speak at local Rotary Clubs and Lions Clubs and things of that nature.
“When speaking I complained about small business owners like myself having a lot of red tape thrown at them by all levels of government and all political parties.
“So I was then singled out as someone who could be saying the same thing on the floor of the House of Commons.
“I kind of laughed at that, because I never planned to go into politics. I never considered myself a politician. I still don’t consider myself a politician, although I served 21 years in Ottawa, nearly 10 of them as a cabinet minister.”
During all those years, did you pay much attention to events in Czechoslovakia?
“Yes and no. Obviously we knew what was happening when there were major events here. But did we follow daily activities…?
“We had some family here from my mother’s side – we still see them, we’re quite close – so we were in touch with them.
“But we didn’t follow what was happening because we had written Czechoslovakia off. Meaning we never expected that the Berlin Wall, the Iron Curtain, the Soviet Union would fall.
“We didn’t expect it. We didn’t dream about it. We didn’t think about it. We didn’t plan our life around, Oh, we’re waiting until something happens and then we’re going to go back to Czechoslovakia. That was never, never, in our minds.
“Was the fact that we were historically Czech and culturally Czech in our minds? Yes. We were a Czech family living in Canada.
“We ate Czech food. We spoke Czech at home. Thank goodness – I hated to do that when I was a kid, but if I hadn’t spoken Czech at that time I wouldn’t be speaking Czech now.”
Tell us about the first time you came back to Prague after November 1989.
“I actually came with a delegation of business people, seeing whether the changes here would bring business opportunities, which they obviously did, from an investment standpoint, from a privatisation standpoint.
“There were great, great opportunities and I wanted to, as a Czech… we were so positively shocked that this happened, that suddenly there was freedom and democracy here.
“We were very, very excited about what was happening here – the transition, the transformation. I came back several times as a cabinet minister, leading investment and trade delegations.
“Some of those investments are still here, from auto parts manufacturing to the Four Seasons Hotel and many others in between that our delegations brought here…”
Tomáš Baťa was also part of the delegations, is that right?
“I was just going to say. Who helped me very much was Tomáš Baťa. He came on several of those delegations. He was very helpful to me and of course the delegation as a whole – he was always very positively involved.
“So it was a new world. It was a new life. To the point where one I brought my wife to show her beautiful Prague and she loved it here.
“One fine May afternoon, sitting at one of the outdoor cafés with the sun shining, she said, You know Otto, you’ve done enough of politics – why don’t you quit and move here just on a sabbatical and be part of this transformation of your country?
“We thought about it – not very long. At that time there was a leadership election going on in the party in Canada and some people thought I may be seeking the leadership of the party.
“I called a press conference at which I announced that not only am I not seeking the leadership, I’m also after so many years leaving politics.
“We moved to Prague on a sabbatical but I turned that into business opportunities and started my own business here, eventually chairing Deloitte & Touche, now called Deloitte.”
Was it hard for you to adjust to life here after so many years in Canada?
“You know it wasn’t if you didn’t fight it. You had to accept the fact that there would be differences. You had to accept the fact that the bureaucracy was an even more ingrained way of life than it was in Canada.
“So not fighting the changes, not fighting the difficulties of the transition, it wasn’t that difficult. And speaking the language, even though I spoke it very badly at that time, and I’m still not perfect at it, it helped.”
People called that period in the 1990s the Wild East period. Regulations weren’t so tight, there was a lot of corruption. How did you find doing business at that time?
“Very difficult. Corporate governance was unheard of. I wanted to help the transition into a more rule of law environment.
“That’s where I joined forces with Deloitte & Touche, the large international accounting advisory firm, and eventually became chairman of Deloitte Czech Republic and then Deloitte Central Europe. Specifically to help bring in rules, laws and regulations with the then governments that would cut through the Wild, Wild East feeling.
“Corruption, transparency, is still a problem to some extent. But it’s now being dealt with. It’s certainly being talked about by the politicians and others – and major progress has been made over the last 20 years.”
From your perspective, how well did Czechs take to business after so many years of communism?
“I think very well, some. Some not so well. As would be expected.
“But Czechoslovakia prior to the war was one of the easy top 10 economies in the world. So Czechs and Slovaks have it in their genes to be entrepreneurial and business oriented.
“Because of that Czechoslovakia did very well in the transition. There were problems as any country changing so dramatically would have. But Czechoslovakia did exceptionally well.
“And when there was the friendly split-up of Czechs and Slovaks, everyone thought that the Slovaks would go bankrupt, because they maybe didn’t have the industrial depth that the Czechs had.
“But that didn’t happen either. The Slovaks have done very well. In some cases better than the Czechs. So there’s a friendly, competitive spirit between the two and that’s healthy, too.”
Two years ago you became Canadian ambassador to the Czech Republic. I presume in business straight talking is helpful but in diplomacy you have to be more careful what you say?
“Well if you know what you’re talking about, and in business I think I do… everything we do is trying to help Canadian businesses see opportunities in the Czech Republic and Central Europe.
“Everything I do and the embassy does in terms of trade and business is to open doors for Canadian businesses, to create opportunities for them to meet their counterparts here on every level, to open the doors when they need to political support.”
Could you possibly compare the two national characters, if such things exist?
“I think there’s a lot in common. We’ve already covered the fact that both Czechs and Slovaks are business-oriented – so are Canadians.
“Canadians are innovative. They’ve invented a lot of things, from the telephone to field hockey, if I should use a sports reference [laughs]. So have the Czechs – from contact lenses to robots and everything in between.
“The Czechs love nature. So do the Canadians. In fact there’s a part of the Czech Republic which is called Czech Canada. It reminds me of Northern Ontario, and I lived in Ontario.
“So there are a lot of similarities. Someone asked me what the dissimilarities are. I think that Czechs are not as optimistic as the Canadians.
“When they see a half full glass, Canadians tend to say it’s half full, whereas Czechs tend to say it’s half empty. But that’s changing.”
16-10-2015 15:47 | Jan Velinger
In Business News this week: Czech Turbolet passenger planes could be manufactured in Russia in 2020; the average cost of a Prague taxi is 20 crowns per kilometre gas and diesel prices continue to fall; beekeepers see more than 60 million crowns in subsidies; vegetable prices higher than usual.
Czech L-410s could be built in Russia in 2020
Czech L-410 Turbolet passenger planes could be manufactured in Russia in 2020, according to Andrej Kozicyn, the head of the Russian industrial holding firm UGMK, which became the wholesale owner of LET Kunovice Aircraft Industries in 2013. UGMK presented the first L-410NG aircraft design this summer. Some model parts could already be produced within two years. The L-410s manufactured in Russia will be primarily for the Russian market and neighbouring countries.
Average cost of Prague taxi per kilometre is 20 crowns
The average cost per kilometre of a taxi ride in the Czech capital is 20 crowns, alternative taxi service firms Taxify and Liftago have revealed. City Hall enforced a cap on the price per kilometre at a maximum 28 but is offering to raise the price to 32 crowns; taxi companies, however, are lobbying for the ceiling to be lifted to 38 or even 45. Other data gathered showed that taxi drivers, on average, drive between 200 and 300 kilometres per day, but only 25 percent of the distance covered is with customers.
Gas and diesel prices continue to fall
Gas and diesel fuel prices have continued to drop in the Czech Republic: the cost of tanking up is the lowest since February. Over one week, Natural 95 fell by 25 hellers to an average of 30.53 crowns per litre; diesel dropped by six hellers to an average 29.38 crowns, CCS, a company monitoring sales, said. Prices in Prague remain higher than in the rest of the country; by region, Ústí, Liberec and Moravia-Silesia, have the lowest, all currently sell diesel for less than 28 crowns per litre, Ústí has the lowest average price for unleaded gas.
Sixty-four million crowns go to beekeepers
Beekeepers received a total of 64.5 million crowns in subsidies in 2015 and will receive a similar amount next year, the State Agricultural Intervention Fund has confirmed. Half of this year’s subsidies came from the state budget and the rest from EU funds. The Czech Beekeepers’ Association said that more than 50,000 bee keepers, owning almost 600,000 bee colonies, applied for funding this year; they asked for more funding than was available. Despite winter losses, the spring saw good conditions; a kilo of honey currently sells for 130 – 180 crowns. Dark honey costs around 180, the Czech News Agency added.
Vegetable prices rise
Prices have continued to go up for vegetables including potatoes, carrots and paprika peppers, the Czech Statistics Office reports. The Czech Vegetable Growers Union of Bohemia and Moravia, Jaroslav Zeman, confirmed he did not expect prices to fall before the next harvest. He confirmed the conventional wisdom that by this time of the year prices usually fall by 30 – 40 percent, but 2015 had proven an exception. For example, the price of carrots rose by five percent to more than 20 crowns per kilo, a difference of six crowns from the same period last year. Low-cost imports could still influence a drop in prices, but Mr Zeman suggested that was unlikely given yields in the rest of Europe.
© 1996–2015 Český rozhlas
In Business News this week: Czech unemployment rate at lowest level since March 2009; Czech consumer annual prices growth accelerates to 0.4 percent; number of Czechs facing four or more property seizures sharply increases; Export of used cars from Czech Republic grows by 45 percent; the Czech Republic has rolled out its first wine vending machine or “vinomat”.
Czech unemployment rate at lowest level since March 2009
The Czech unemployment rate is at its lowest level since March 2009. According to the figures released by the country’s Labour office this week, unemployment in September dropped to 6 percent from 6.2 percent the previous month. The office currently registers 441.892 unemployed persons and there are on average 4.1 applicants for every vacancy. The positive trend has been driven by strong economic growth. A slight increase in the jobless rate is expected towards the end of the year with the end of seasonal work.
Czech consumer annual prices growth accelerates to 0.4 percent
Czech consumer prices inflation accelerated in September to 0.4 percent year-on-year, the Czech Statistical Office reported on Friday. The inflation figure was 0.1 percentage point higher than in August. Analysts had expected the inflation rate would be flat or fall. The increase was fuelled mainly by price increase of holidays and services as well as by the higher prices of alcohol and tobacco.
Number of Czechs facing four or more property seizures sharply increases
The number of Czechs who are facing four or more property seizures has markedly grown despite the overall number of property seizures going down in the long-term, the Czech Chamber of Bailiffs has warned. While the number of people facing property seizures in the Czech Republic has dropped by 27 percent over the past two years, from one million in 2013 to 730,000 in 2015, the number of seizures has increased at the same time by 29 percent, from 3.3 million to 4.4 million.
Export of used cars from Czech Republic grows by 45 percent
The export of used cars from the Czech Republic will grow this year by 45 percent to 91,000 vehicles, compared to 2014. The reason behind the steep increase is the artificially weakened Czech currency. According to the vehicle-security firm CEBIA, which monitors the origin of cars on Czech roads, the exported cars are usually less than five years old and they are exported mainly to other EU countries. The number of used cars imported into the Czech Republic has increased by around 25 percent, and more than fifty percent of these cars are over 10 years old.
Czech Republic launches its first wine-vending machine
The Czech Republic has rolled out its first wine vending machine or “vinomat”. The trial operation of the wine-selling machine, which functions like a normal coin operated drink dispenser, was launched in Ostrava earlier this week. Buyers are required to insert their ID card into the machine in order to verify their age. Vinomat, which is operated by the Pavlovín company from the wine town of Velké Pavlovice, currently offers four types of wine.
© 1996–2015 Český rozhlas
02-10-2015 12:07 | Chris Johnstone
In this week’s Business News: finance ministry offers multi-billion crown pardon for firms; furniture makers look to record year; Japanese car parts firm follows the lead to Kolín; Kofola drinks company moves forward with Prague shares launch; and O2 demands no show for top football games.
Almost 11 billion crowns in tax dues and penalties pardoned
The Czech Ministry of Finance headed by businessman Andrej Babiš is showing exceptional clemency towards companies. Last year the ministry pardoned unpaid tax totaling almost 6.0 billion crowns and forgave interest and penalties amounting to 5.0 billion. Those figures represent jumps of around 200 percent and more 150 percent respectively. Authorities say one of the reasons for the increase is a change in the European rules for clawing back funds.
Far from wooden performance from furniture makers
The Czech furniture sector is expecting a record year for sales this year. The Czech Association of Furniture Makers says turnover this year should total around 43 billion crowns, around 3.0 billion more than in 2014. Around half of Czech production is exported with the biggest buyer neighbouring Germany. But imports, mostly from Poland and China, account for almost half of furniture sales on the domestic Czech market.
Tsubakimoto heads towards Kolín cluster of Japanese firms
Japanese car components producer Tsubakimoto has chosen the Czech Republic for its first European factory. The company is investing around 440 million crowns in a plant near the central Bohemian city of Kolín for producing timing systems for car engines. Production at the plant should start in 2017. Tsubakimoto will be the fourth Japanese investor attracted to the industrial zone on the outskirts of Kolín. The Japanese company looked at other investment possibilities in the region including Slovakia.
Drinks producer Kofola pushes forward with Prague listing
Czech-Slovak drinks company Kofola this week made its debut on the Prague Stock Exchange. It has been given what is termed a “technical listing” with no shares as yet changing hands. The latest move follows the switch of the drinks’ company headquarters from Warsaw to Ostrava. And the listing raises expectations that Kofola shares will be fully launched and trading on the Prague Stock Exchange by the end of the year. A prospectus paving the way for the launch of the shares has already been cleared by the Czech National Bank. Kofola is one of the leading non-alcoholic drinks companies in Central Europe.
O2 calls wins red card over Champions League screenings
Telecommunication company O2 is playing hard ball over the rights to screen top football games from the Champions League in the Czech Republic. It won an order from a Prague court this week demanding cable companies black out images of the top games shown on foreign television channels available in the Czech Republic. O2 won the rights to screen most of the top football games on its television and cable channels for this and the next two seasons, sharing a few games with Czech public service broadcaster Czech Television. O2 is owned by the PPF company of richest Czech Petr Kellner.
© 1996–2015 Český rozhlas
Czech plane maker targets ‘unfair’ French tender; offer to keep Důl Paskov mine operating; ČEZ offloads hydro unit but eyes German coal plants; slim picking for Czech IT managers; and richest Czechs see wealth eroded.
Aero Vodochody to challenge French tender
Czech aircraft producer Aero Vodochody is to challenge a French decision to close off its chances in a tender for around 20 training aircraft for the army. The company failed to make it through to the tender shortlist with its offer of the L-39NG aircraft. It says some of the conditions laid down were discriminatory and procedures dubious. The complaint will initially target the state authority for armaments purchases with a court challenge likely to follow in the case that this fails.
OKD mine offered extended lifeline
Continued mining at one of the Czech Republic’s last deep mines looks likely to continue in spite of low world prices. Mining company OKD is reported to be willing to prolong a deal with the government to keep the Důl Paskov mine going for at least a further six months. OKD has the option to exit an original deal aimed at safeguarding the thousands of jobs at the mine until 2017. That option opened up in September when coal prices remained for nine months in a row below 110 dollars a tonne.
ČEZ sells Turkish hydro plant, eyes Vattenfall assets
State-controlled power company ČEZ has sold off one of its Turkish assets, an 80 MW hydro electric plant in the northeast of the country, for around 2.0 billion crowns. The near 70 percent state owned firm said it had an attractive opportunity to sell up to a local power company. ČEZ has meanwhile, along with fellow Czech power company EPH, said it is interested in buying the German coal fired power plants being sold by Sweden’s Vattenfall.
Czech IT managers among world’s worst paid
Czech IT managers are among the worst paid in the world, according to a survey by the global jobs consultancy MyHiring Club. Average monthly wages are around 86,000 crowns, around three-and-a-half times the Czech average wage, but still in the bottom 10 countries of the worldwide survey. Czech IT pay rates come in just ahead of those in China and India but below those of, for example, Argentina. Many West European and American companies have outsourced some of their less demanding IT workload to the Czech Republic.
Top three Czech billionaires buck trend with shrunken assets
The three wealthiest Czechs have had lean times of late according to a study by Capgemini and RBC Wealth Management. Number one on the local wealth ladder, Petr Kellner of the PPF empire, saw his estimated material worth slump almost 6.0 percent, partly due to the problems of his Home Credit business in Russia. Head of the Agrofert agro-chemical group, Andrej Babiš, has seen his wealth shrunk by just over 16 percent, according to the study. And coal and energy business billionaire Pavel Tykač, witnessed a 2.4 percent drop. They were the exceptions to the rule with most of the top 100 Czech and Slovak crown billionaires adding to their assets.
© 1996–2015 Český rozhlas
In Business News this week: Czech foreign debt grows to CZK 2.9 trillion in second quarter; hop harvest worst in 45 years; Czech aviation firms increase turnover by 15 percent; and Czech Republic has EU’s highest number of breweries per head.
Czech Republic’s foreign debt grew to 2.9 trillion in second quarter of 2015
The Czech Republic’s foreign debt grew by CZK 137 billion year-on-year to CZK 2.9 trillion in the second quarter of this year, amounting to 66.4 percent of gross domestic product, the Czech National Bank said on Friday. The foreign liabilities of the government sector accounted for 21.3 percent of the total external debt, while the banking sector is responsible for 29.4 percent. The external liabilities of the corporate sector accounted account for the remaining 49.3 percent.
Hops harvest of worst in 45 years
This year’s Czech hop harvest is likely to be the worst in the past 45 years, the Hop Growers Association announced this week. According to preliminary results, the yield of hops this year dropped by 35 percent compared to 2014, to 4100 tonnes of hops. Czech hop growers expect a slump in profit amounting up to 350 million crowns, the chairman of the Hop Growers Association, Luboš Hejda, said. This year’s crops were damaged by very high temperatures and droughts. Dry weather has also caused hops to have a lesser concentration of alfa acids, which are responsible for the bitter flavour in beer.
Czech aviation firms increase turnover by 15 percent
Czech firms associated in the Confederation of the Czech Aviation Industry this year have increased their turnover by 15 percent compared to the previous year to CZK 11.9 billion, the association’s representatives said this week. Last year’s export amounted to CZK 10.5 billion. Thanks to a growing number of commissions last year, the number of employees in the Czech aviation industry increased by 14 percent. However, firms are complaining of a lack of people with adequate technical qualification.
Czech Republic has highest number of breweries per head
The Czech Republic has the highest number of breweries per head among EU countries. According to data released this week by the European Association of Breweries there is one brewery for 31, 333 people in the Czech Republic. Denmark placed second with one for every 37,500 people, followed by Austria, Lithuania and Great Britain. The Czech Republic moved to first position from last year’s third place. According to the monthly Pivo, Bier & Ale, there are currently 336 breweries in the Czech Republic.
Čedok owner buys luxury hotel complex in Croatia
The Odien financial group, which owns the Čedok travel agency in the Czech Republic, has acquired a luxury hotel complex in Croatia’s Split from the Austrian state company Heta Aset Resolution, the marketing head of Čedok, Tomáš Brejcha, announced this week. The transaction reportedly amounted to billions of crowns. Grand Hotel Lav is the biggest five-star hotel in Croatia. It features over 380 rooms, 800 metres of beaches and promenades, a private marina and one of the country’s largest conference facilities. According to Mr Brejcha, the hotel will also be available to Čedok clients.
© 1996–2015 Český rozhlas
In this week's Business News: Unipetrol announces its largest ever investment project; Czech firms say they could put 5,000 migrants to work; inflation growth slows for third consecutive month; China’s Changhong electronics firm announces it is to expand its Nymburk plant; and the Czech Republic sees boom in dollar millionaires
Unipetrol announces huge investment
Czech oil distributor Unipetrol is preparing to undertake its largest round of investments in Czech history. The company will build a new oil processing facility worth CZK 8.5 billion after signing a deal with Italian engineering firm Technip. The deal will see a new polyethylene manufacturing plant built in Záluží in north-western Bohemia, planned to go in to operation in 2018. According to Unipetrol’s CEO Marek Świtajewski, the move will enable the company – owned by Poland’s PKN Orlen – to utilise the most modern available technologies.
Czech firms could put 5,000 migrants to work
Czech firms are able to immediately put to work 5,000 immigrants, according to a study published by the Czech Transport and Industry Association. As the country experiences a period of strong growth, demand is high for qualified technical workers, which, the Association argues, could even be sourced from among the wave of Syrian migrants entering the EU. However, such employment could also be hindered by language barriers and the long process of applying for a work permit, writes Novinky.cz. The Association is set to discuss with the Czech government how to devise a programme to retrain migrant labourers and also school them in the Czech language.
Inflation growth slows for third consecutive month
The rate of inflation growth in the Czech Republic slowed for the third month in a row, according to new figures released by the Czech Statistics Office. Previously, the Czech National Bank had forecast 0.7 percent growth in August – but the real number was only 0.3 percent. Chiefly responsible for the trend are falling fuel prices, while the prices of a number of groceries, including grain and dairy products also fell. The Czech National Bank forecasts inflation levels of 2 percent by 2017.
China’s Changhong to expand Nymburk operations
The European arm of Chinese consumer electronics manufacturer Changhong has announced that it is set to invest CZK 650 million to expand its plant in the Czech town of Nymburk, which currently employs 300 people. Changhong’s investment in the plant began back in 2006, at the time representing a rare example of Czech-Chinese economic cooperation. According to President Miloš Zeman – a staunch advocate of closer economic ties with China – the volume of overall Chinese investments in the Czech Republic could soon rise as high as CZK 10 billion.
Czech Republic sees boom in dollar millionaires
The number of dollar millionaires living in the Czech Republic climbed last year by 10 percent to a record 21,400 people, according to the results of a new worldwide survey published by French consulting firm Capgemini and US firm RBC Wealth Management. The data also shows that the rate of growth in Czech millionaires considerably exceeds the global average. Among the contributing factors are strong Czech GDP growth and strong exports.
© 1996–2015 Český rozhlas
In Business News this week: average monthly salary reached 26,278 crowns in second quarter of 2015; EC approves government’s plan to extend support for biofuel; cyber-security firm CyberGym to build commercial Training Arena in Czech Republic; Česká spořitelna to launch pre-paid debit card for children; Czech firm opens household utensils manufacturing plant in Vietnam.
Average monthly salary reached 26,278 crowns in second quarter of 2015;
The average monthly salary in the Czech Republic in the second quarter of 2015 rose by 3.4 percent, compared to the same period last year, according to the figures released by the Czech Statistical Office on Friday. Accounting for inflation, real growth was 2.7 percent. Average monthly pay stood at 26,287 crowns (over 970 euros) at the end of August. The results exceeded expectations of analysts, who anticipated a wage hike of about two percent.
EC approves government’s plan to extend support for biofuels
The European Commission has approved the Czech government’s plan to extend the support of the so-called first generation biofuels, based on food or animal crops, the daily Hospodářské Noviny wrote this week. The draft legislation, which extends the fuel support, has been repeatedly debated in the lower house of parliament since April this year. The legislation has come under fire from opposition deputies who claim that it benefits the agro-chemical group Agrofert owned by Finance Minister Andrej Babiš. The extended tax benefits, which should be in place until 2020, should amount to nine billion crowns.
Cyber-security firm CyberGym to build commercial Training Arena in Czech Republic
Israeli cyber-security firm CyberGym plans to build its first commercial Training Arena in the Czech Republic. Customers will be able to acquire defensives against even the most sophisticated cyber-attacks, the company says. It will mainly serve institutions using key infrastructure for which a potential cyber-attack could impact the whole of society, such as banking, energy and telecommunication providers. The arena is set to open in Řitka near Prague in February next year. According to CyberGym’s head, Ofir Hason, the Czech Republic was selected because it had some of the best IT experts in the world and is one of the first countries to a adopt law on cybernetic security.
Česká spořitelna to launch pre-paid debit card for children
The country’s largest bank, Česká spořitelna, plans to launch a pre-paid debit card for children in mid-September, the daily E15 reported on Friday. The biip project consists of a prepaid Mastercard debit card, on which parents load money and monitor their child’s transactions with a mobile banking application. It is intended for children from the age of 10 upwards. Similar schemes have recently made their way on Czech market, including CSOB’s Cool karta or Napka by Rockaway.
Czech firm opens household utensils manufacturing plant in Vietnam
Czech company Elmich Group has opened a new household utensils manufacturing plant in Vietnam. The company invested over 430 million crowns in the project. The new plant in northern Ha Nam province currently employs around 100 people and plans to create another 200 workplaces in the future. Some 80 percent of the factory’s products are to be exported to European and Asian markets. Overall investments of the Czech Republic in Vietnam exceed 100 million US dollars to date.
© 1996–2015 Český rozhlas
In Business News this week: Many companies are not happy with the new minimum monthly wage rate; Regional Development minister says Czech Republic could fail to draw 50 billion crowns in EU funds; Škoda Auto rated most dependable car maker in British report; up to 1,500 small and mid-level Czech businesses can benefit from Juncker package; construction companies say there are not enough skilled labourers on Czech market.
Firms less than happy with new minimum wage
Employers are less than happy with the monthly minimum wage rate being raised by 700 crowns as of January next year, saying the rise could affect firms' competitiveness and lead to lay-offs. The government took the step to raise the minimum monthly salary to 9,900 crowns. Employers had recommended a rise of 500 crowns instead - a difference of two hundred. The Czech Chamber of Commerce has warned that the rise could negatively affect firms in sectors which are stagnating such as the textile industry or security. A poll conducted by financial daily Hospodářské noviny suggests that 70 percent of businesses were against the rise.
Czech Republic could lose up to 50 billion crowns in EU funds, says Regional Development minister
The Czech Republic could lose between 36 billion and 50 billion crowns in EU funds for projects in 2015, the Minister for Regional Development, Karla Šlechtová revealed on Thursday; she stressed that that was in the worst-case scenario. Earlier, the ministry rejected an assessment by the Supreme Audit Office that the number could reach 105 billion - suggesting the estimate was old and that the ministry was working with a much lower variant. Minister Šlechtová said the latest analysis of drawing of subsidies from EU funds had revealed a "positive shift". The main factors that the estimates take into consideration are the accumulation of expenditures at the end of the programme period, delays in some administrative procedures and problems related to the Environmental Impact Assessment (EIA), she said.
Škoda rates as "most dependable car maker" in British study
The Mladá Boleslav-based Škoda Auto now ranks as the most dependable car brand in Great Britain, according to the last annual J.D. Power Vehicle Dependability Study (VDS), the manufacturer said in a press release on Thursday. South Korean car maker Kia finished second, while Japanese manufacturer Suzuki was third. The study polled owners of cars manufactured over the last three years and catalogued their experience. How companies scored is based on problems experienced per 100 vehicles and Škoda posed the fewest. All Škoda models ranked above average, with the Fabia ranking third in the supermini class, Škoda Auto elaborated. Britain is the second most efficient market for Škoda Auto in Western Europe, and it is the fourth most powerful market in the world. In the first six months of 2015 the carmaker sold more than 41,000 vehicles in Britain, approximately the same number as last year.
Small and mid-sized Czech companies will get to use money from Juncker package
Domestic companies will get the chance to use money from the Juncker package for the first time in the coming two years, an amount totaling the equivalent of 4.4 billion crowns, the Industry and Trade Ministry announced this week. The Czech guarantee and development bank CMZRB has agreed with the European Investment Fund on further support to small and medium-sized Czech businesses. CMZRB will support loans for up to 1,500 small and mid-sized companies. It will provide guarantees for investment loans and loans for getting operating reserves up to the aforementioned amount. Eligible applicants will be companies with fewer than 50 employees.
Two-thirds of construction firms say skilled labour lacking on Czech market
Two-thirds of construction companies on the Czech market have cited a lack of skilled workers as a continuing problem - with larger companies suffering the most. Firms estimated earlier already that more than 50,000 people lost jobs in construction over the past years due to the economic crisis. Almost a third of companies said they had problems filling specialized positions while 37 percent said it lacked staff in general. Jiří Vacek, the director of CEEC Research, confirmed that Czech construction lacks technicians, machine operators, bridge builders, qualified people for work on railways, as well as plasterers, masons, electricians and other personnel.
© 1996–2015 Český rozhlas
In Business News this week: central bank see faster growth but lowers inflation expectations; Hamleys to open flagship store in Prague; German owners seen selling up chain of regional dailies; Caterpillar mining unit to closes; and Czech unmanned aircraft company targets 2016 production.
Central bank ups 2015 growth but lowers inflation expectations
The Czech National Bank has upped its growth forecast for this year to 3.8 percent from its previous 2.6 percent. But it now sees a more gloomy outlook for 2016 with expected growth cut to 2.8 percent from May’s 3.2 percent. The bank lowered its inflation expectations, seeing a 1.8 percent rate by the end of 2016 instead of its previous expectation of 2.1 percent. The bank has a target for inflation to be around 2.0 percent.
Global toyshop chain to open flagship Prague store
Legendary toys retailer Hamleys is set to open one of its biggest stores worldwide in the centre of Prague. The new store, covering more than 6,000 square metres, will be slightly bigger than Hamleys flagship outlet in London but is expected to emulate its success and visitor numbers. Around one million customers, big and small, cross the threshold of the Regent Street store every year. The Prague store will be the company’s first on Central Europe.
Last German media owner seen exiting Czech market
The last major Czech newspaper group in German hands should be sold to the local investment group Penta within two weeks, the business daily Hospodářské Noviny announced this week. Penta is reported to be finalizing terms for the takeover of the publisher Vltava-Labe-Press. It’s main asset is a network of regional daily papers with a total readership of around 630,000. German newspaper groups piled into the Czech media market in the early 1990s but have been bought out by Czech companies and oligarchs in recent years.
Czech mining equipment company set for closure
Caterpillar Global Mining Czech, the Czech mining division of the US corporation, will shut down its Ostrava factory by the end of the year with the loss of just over 200 jobs. The US-based global machinery and equipment company says it has worldwide overcapacity for production of mining equipment and components and that some production will be shifted to China. Caterpillar took over the Ostrava company in 2011.
Unmanned Czech aircraft set for production launch in 2016
A Czech company which has developed a mid-sized unmanned aircraft capable of taking moderate loads of up to 10 kilos expects to start production by the end the year. Primoco UAV says it hopes to start production in January after receiving dozens of orders on the basis of its prototype plane. The unmanned aircraft can fly more than 400 kilometres and stay in the air for around eight hours. The company says its business applications include surveying work, checking telecommunications infrastructure, and crowd surveillance.
© 1996–2015 Český rozhlas
31-07-2015 14:25 | Chris Johnstone
In Business News this week: 2015 growth seen reaching almost 4.0 percent; takeover bid reported for Unipetrol; massive bill presented to Vítkovice boss; Karlovy Vary mineral water giant snaps up domestic rival; and state emergency reserve considers live animals over dead meat.
Economic growth in 2015 seen at just under 4.0 percent
The Ministry of Finance has dramatically upped its forecast for economic growth this year. The latest prediction out this week sees Gross Domestic Product climbing by 3.9 percent. As recently as April the forecast was for only 2.7 percent. But the ministry sees 2016 growth at a more modest 2.5 percent The main reason for the revision for this year was the higher than expected 4.0 percent growth performance in the first quarter.
Consortium buyout offer reported for main Unipetrol shareholding
The Czech Republic’s biggest oil and petrochemical holding, Unipetrol, is the subject of a 30 billion crown bid from a consortium made up of Czech businessman Daniel Křetínský, the J&T Group, and PPF investment group. Business daily Hospodářské Noviny revealed the bid citing several independent sources. The Czech holding is currently majority owned by Poland’s PKN which is reported to be mulling the bid. J&T has long been the second biggest shareholder in the group which numbers among its assets the biggest network of Czech petrol stations, Benzina, and dominant refiner, Česká Rafinérská.
Vítkovice shareholder wins major payout ruling over shares in engineering giant
The main shareholder in the Czech Republic’s biggest engineering group, Vítkovice, Jan Světlík, is facing a bill for almost 1.7 billion crowns in the latest instalment of an almost 13 year battle over ownership of the company. The payment has been ordered in a ruling by the Chamber of Commerce. It found in favour of former Vítkovice shareholder David Beran who appealed an earlier ruling that had offered him a paltry 75 million crowns for his former 45 percent stake in the engineering giant. The case is far from closed with Světlík calling for the police to intervene in what he describes as a manipulated decision.
KMV to acquire Czech mineral water rival
The biggest Czech mineral water company, Karlovarské Minerální Vody, strengthen its grip on the domestic market with the purchase of rival Hanácká Kyselka. KMV previously had a 30 percent stake in the firm. The owner of the 70 percent stake, investment group D.K. Invest, says it is selling up in the face of shrinking sales over the last two years. The Karlovy Vary based mineral water company says it will invest in the brand and seek new markets.
Emergency reserves authority favors live cattle over frozen meat
Meat on the hoof rather than in large warehouses is an idea that has been floated by the state authority for emergency reserves. The authority has suggested that it earmark live cattle and other animals for emergency stores from 2017 rather than having the dead meat in warehouses. Savings on warehouse costs could be considerable. But the idea has met with some opposition from the Ministry of Agriculture. It warns that the live animals could be wiped off the potential reserves if, for example, there was an outbreak of a major disease.
© 1996–2015 Český rozhlas
17-07-2015 15:45 | Jan Velinger
In Business News: Czech Airlines posts first profit in several years; General director of AcelorMittal meets with PM; higher excise taxes on liquor and tobacco fails to meet expectations; Becherovka produces its first kosher liquor.
Czech Airlines posts first profit in several yearsCzech Airlines has posted its first profit in several years: 12.9 million crowns in the first half of 2015. Last year, in the same period, the carrier registered losses of 408.2 million. The airline says the turn-around is the result of crucial and often difficult restructuring – which included asset sales, layoffs and pay cuts. For example, stewards and stewardesses’ average gross monthly wages were scaled back from a previous 43,000 to around 32,000 crowns. On Friday, the airline management thanked employees who had accepted changes and helped the firm back on course.
General director of ArcelorMittal meets with PMPrague this week played host to the general director of the world’s biggest steelmaker, ArcelorMittal. Lakshmi Mittal met with Prime Minister Bohuslav Sobotka and industry minister Jan Mládek to discuss plans for massive investments at its Ostrava plant. The Ostrava site could be in the frame for the construction of a state of the art steelwork which could safeguard thousands of jobs in the city. Discussions are believed to have focused on the state support that could bring that sort of investment to the Czech Republic.
Supreme Audit Office says collection of excise tax lagging behind numbers projected in state budgetHigher excise taxes on spirits and tobacco products have not brought in as much revenue long-term as expected, the country’s Supreme Audit Office reveals in its EU 2015 report. According to the bureau, the state last year collected excise taxes worth a total of 141.3 billion crowns or 96.2 percent of the figure projected in the state budget; the amount collected on tobacco was slightly higher, at 93 percent while the number for liquor brought in four percent more than expected. The Supreme Audit Office began monitoring the situation last year to determine whether customs officials were effectively gathering excise taxes in line with the law. The operation will end in August and the results will be published a month after.
Czech Republic rates among top countries for German investmentThe Czech Republic has been placed second on a list of countries attracting the most German investment, after Poland, a poll conducted by ČNOPK – The German-Czech Chamber of Commerce and Industry found. In all, some 15 countries were ranked. Estonia, Slovakia, and Latvia were also placed in the top five. Spokesman Christian Rühmkorf confirmed that while the Czech Republic, for example, received high marks for economic stability, R&D, and the availability of local suppliers, it fared poorly in the area of skilled labour, contributing to the country’s second-place result.
First bottle of kosher Becherovka producedPublicists for the Karlovy Vary-based liquor company Jan Becher announced on Friday the manufacturer had capped the first bottle of its brand-name liquor Becherovka Original certified kosher. Prior to receiving an international certificate signed by Rabbi Menachem Kalchheim, the production process and ingredients were verified. The kosher version of the brand is being produced largely for the Israeli market but will also be available in the Czech Republic.
© 1996–2015 Český rozhlas
In Business News this week: Czech E-commerce sales rise by 20 percent in second quarter of 2015; Hainan Airlines to launch services from Beijing to Prague; storms result in over 100,000 cubic metres of timber; most Czech 12-year-olds own mobile phone; Czechs have up to 400,000 private pools.
Czech E-commerce sales rise by 20 percent in second quarter of 2015Czech E-commerce sales rose by 20 percent in the second quarter of the year compared with the same period in 2014 according to a survey by the consultancy Acomware. The same pace of growth is expected for the next three months. For the first time purchases over mobile phones surpassed those on tablets. Top e-commerce purchases are electronic and children’s items and household goods.
Hainan Airlines to launch services from Beijing to PragueHainan Airlines, the first Chinese carrier to launch direct flights to Prague, has filled in details of its plan to launch services from Beijing. Three flights a week from the Chinese capital will start on September 23 with return tickets priced at just over 14,000 crowns. The start of direct services between Prague and Beijing has been billed as a great opportunity for the Czech Republic to boost trade with China and re-balance some of the enormous trade deficit with the country.
Storms damage over 100,000 cubic metres of timberTrees amounting to around 100,000 cubic metres of timber were felled in recent storms around the country, mainly in the Olomouc and Pardubice regions, the state forestry company announced on Thursday. That amounts to about one percent of the planned annual timber production, which is expected to reach 7.67 million cubic metres this year. The total extent of the devastation is still being assessed. Authorities in the regions hardest hit by storms have warned visitors not to walk in the forests due to the danger of falling trees. The worst damage was recorded in 2007 when hurricane Kyril caused over five million cubic metres of wood to come to the market.
Most Czech 12-year-olds own mobile phoneSome 90 percent of Czech children own a mobile phone by the age of 12, according to a study carried out by NMS market research. Most Czech kids get their first mobile phone between the age of eight and 10 and nearly two fifths have had five or more telephones by the age of 19. The majority of children, 39 percent, spend on average 60 minutes a day on the phone, while 18 percent use it for more than 180 minutes. Children mostly use their phones for sending text messages and for calling, as well as for listening to music and taking pictures. Some 74 percent of Czech children admitted to using their phone during classes.
Czechs own up to 400,000 private poolsEvery third house in the Czech Republic has a private swimming pool in its back-yard, a study carried out by the Czech gardening and outdoor equipment chain Mountfield suggests. The survey points out there are between 360,000 to 400,000 privately owned swimming pools in the Czech Republic and the same number of inflatable pools. According to swimming pool provider Abixon, Czechs prefer swimming pools sized three to six and four to eight metres. Czechs belong among Europe’s leaders in terms of private pools per head. According to figures from the European Union Swimming Pool and Spa Association from 2012, Czechs are placed third in EU in terms of the number of private swimming pools per head, trailing only Italy and Spain.
© 1996–2015 Český rozhlas
03-07-2015 15:26 | Ruth Fraňková
In Business News this week: the Czech economy grew by four percent year-on-year in first quarter of 2015; E15: MAFRA shows interest in acquiring Slevomat; Car sales in the Czech Republic went up by five percent in the first six months of this year; Czech cinemas charge an average 129 crowns for a seat.
Czech economy grew by four percent year-on-year in first quarter of 2015
The Czech economy grew by four percent year-on-year in the first quarter of 2015, according to a revised estimate by the Czech Statistical Office, which was published on Friday. The previous estimate from the end of May put growth at 4.2 percent. The office also downgraded its estimate for quarterly Gross Domestic Product growth from the original 3.1 percent to 2.5 percent. The revision was caused by new data on value added tax. Despite the revision, the figures still show the biggest year-on-year growth since 2007 and the strongest quarter-on-quarter growth ever.
Moody’s: Czech government accounts look solid in 2015-2016
The Czech Republic’s government accounts will likely remain solid in 2015-2016, supported by prudent fiscal policy and relatively low debt level, the international rating agency Moody’s Investors Service indicated in the country’s annual Credit Analysis. However, the agency notes that political uncertainty represents a certain risk. “The Czech Republic benefits from the government's track record of prudent fiscal policy and balance sheet strength. This is supported by relatively low government debt ratio and strong debt-affordability," Moody’s analyst Marco Zaninelli said. Moody’s notes that the Czech economy is experiencing a strong rebound and forecasts an increase in real GDP growth to 2.5% in 2015 and 2.7% in 2016, driven mainly by domestic demand.
MAFRA shows interest in acquiring Slevomat: E15
The publishing house MAFRA, purchased by Andrej Babiš in 2013, is interested in acquiring Slevomat, the biggest Czech Internet site offering bargain buys, the daily E15 reported this week. The company, owned by investment group Miton a Enern, has paid off initial investments and posts profit margins of around 10 percent. Some 1.2 million people have shopped on Slevomat and the company has information about 1.7 million users in its database. Slevomat and MAFRA representatives refused to comment on the possible acquisition.
Car sales in Czech Republic up by fiver percent in first half of 2015
Car sales in the Czech Republic rose by five percent in the first six months of this year, compared with the same period in 2014. Some 113,261 new vehicles were sold between January and the end of last month. Czech car maker Škoda Auto was the best-selling brand in the country with over 36,500 sold cars, followed by Hyundai and Volkswagen. The most popular model was the Škoda Octavia, followed by the Fabia and Rapid. Low mid-sized class cars represented 23 percent of total sales, followed by small cars (19 percent) and sport utility vehicles (18 percent).
Czech cinemas charge on average 129 crowns per ticket
Czech cinemas on average charge 129 crowns for a seat this year, which is roughly 2.5 percent more than in the previous year, according to a study Global Entertainment Media Outlook 2014-2018 carried out by the consultancy PwC. The price of cinema tickets is expected to rise at the same pace over the next four years. The average price of a cinema ticket worldwide is 101 crowns or 3.7 euros. The difference between the admission price to small local cinemas and large multiplexes in the Czech Republic has been increasing. While local cinemas charge around 100 crowns, ticket prices at multiplexes sometimes reaches over 300 crowns. Revenues from online video streaming in the Czech Republic this year for the first time surpassed revenues from the sale of DVDs or Blu-ray.
© 1996–2015 Český rozhlas
In this week’s Business News: Czech Republic is wealthiest post-communist EU country; more state funds promised for local filmmakers; US chopper firm gets cosy with Czech company; free carriages to be offered to rail companies; and state broadcaster threatened with fine for promoting fast food giant.
Czechs overtake Slovenes in wealth stakesThe Czech Republic has leapfrogged Slovenia to become the wealthiest post-Communist state in the European Union. The Czech Republic now has a slender lead over Slovenia both in terms of actual individual consumption - a measure of household wealth - and Gross Domestic Product per person. Czechs scored 75 to Slovenia’s 74 on the first measure and 84 to 83 on the second, according to the latest June figures from the European statistics office. The EU average is 100. Slovenia for long led the field as the most developed part of former Yugoslavia.
Stepped up state funds for local filmsThe government is preparing to offer Czech filmmakers more state money. In a meeting with prime minister Bohuslav Sobotka and culture minister Daniel Herman filmmakers were promised that around 180 million crowns a year could be set aside for them. Combined with payments earmarked for filmmakers from private sources, mostly commercial television companies, this could amount to around 360 million crowns a year. Czech filmmakers say they have some of the strongest local audience figures for domestic films in Europe but often do not have the financing to increase output.
Bell Helicopters seals LOM dealUS company Bell Helicopter has a signed a contract with Czech firm LOM Praha under which it will undertake services, alterations, and improvements for its military helicopters across the whole of Central Europe. Czech state owned company LOM currently mainly specialises in repairs and modernisation of Russian helicopters. Bell Helicopter says it is hoping to land a Czech army contract for 12 multipurpose helicopters which would replace ageing Russian models.
Free rail carriages on trackThe Czech state is to offer rail carriages for free to firms which win contracts for operating subsidized regional passenger routes under plans being drawn up by the Ministry of Transport. The ministry would claim 85 percent of the costs of providing the carriages from European Union funds and meet the rest of the costs through state funds. The purchases of just over 12 billion crowns worth of carriages is being interpreted as one way of pumping European funds. Private as well as the state owned passenger rail company, Czech Railways, could benefit from the offer.
Fine threatened over fast food placementAnd finally public broadcaster Czech Television looks like it could have got into trouble for what appears to be some pretty blatant product placement advertising. The national broadcasting watchdog is investigating how one of the moderators of an afternoon hockey program was shown passing the fast food giant McDonald’s tent with a hamburger and chips and offered her a chip as she tried to present the show. A fine of 2.5 million crowns could follow.
© 1996–2015 Český rozhlas
In this week’s Business News: Czech redundancy payments some of lowest Europe-wide; inflation rises but still way below target rate; rail company faces one billion crown bill; survey reveals happy Czech bank customers; and car sector sees turnover soar in 2014.
Czech dismissal costs some of lowest in EuropeThe costs of sacking top and experienced managers in the Czech Republic for their employers are some of the cheapest in Europe, according to a survey by Deloitte Legal, the arm of the international consultancy. It carried out a survey of dismissal costs in 29 European counties. Czech labour rules result in basic dismissal charges being cheaper than in neighbouring Poland and Slovakia. One factor is that redundancy payments are the same if you have served two years with the same company or more than 15.
Inflation rate climbs but central bank cautiousCzech year-on-year inflation ramped up in May to the relatively high level of 0.7 percent. That is the highest rate since October 2014. But the news of more robust price rises than expected did not bring rejoicing from the Czech National Bank, which is keen to see prices rises moving up to its target of around 2.0 percent. It pointed out that the core inflation rate was 0.5 in May if you take out the impact of some indirect tax rises. Higher prices for fruit and vegetables, cigarettes, and utility charges apart from electricity were among the biggest factors in latest figures.
Rail company faces one billion bill for cancelled power contractThe Czech company responsible for maintaining the rail network has lost a five year court battle and now faces a more than one billion crown bill. The state controlled company signed a long term contract to buy electricity from dominant electricity producer ČEZ in 2008. The rules then changed and the rail company sought to cancel the long term contract and shop around for cheaper supplies. ČEZ objected and sued for 800 million crowns. Interest and legal costs have now taken that bill to over one billion crowns.
Czech bank customers second happiest in world says surveyCzech bank customers are some of the most satisfied in the world according to the, perhaps surprising, survey results by the company Capgemini and grouping of banks and insurers, EFMA. Their annual retail banking survey put Czech customers as the second most satisfied in the world after Canada. The overall satisfaction score in the Czech Republic jumped by 3.5 points to 77.5 points compared with the last survey in 2013. The overall trend, especially in Western Europe, was of lower customer satisfaction and an increasing number of clients saying they are ready to switch to another service. One of the reasons is the closure of local branches and increased competition from everyone from supermarkets to phone companies now offering financial services.
Car sector responsible for quarter of industrial productionCzech car and car parts producers boosted their turnover in 2014 by almost 15% to total around 991 billion crowns, the Automobile Industry Association announced this week. Their industrial exports rose by just over 15% to 845 billion crowns. The car sector now counts for a quarter of all Czech industrial production, just over 23 percent of exports, and just under 7.5 percent of total Gross Domestic Product.
© 1996–2015 Český rozhlas
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