Business News

Another ambitious plan to boost economy

The Ministry of Trade and Industry is planning to boost the country's economic growth with massive investment. The investments, amounting to 265 billion Czech Crowns, which is in fact nearly half of this year's state budget, would help increase the GDP, reduce unemployment, enhance industrial performance and increase the purchasing power of the population. Another of its aims is to strengthen the Czech economy prior to the Czech Republic's accession to the European Union. The programme also includes support for 13 of the weakest regions in the country, export incentives and infrastructure investment.

FinMin worried about military aircraft cost

Finance Minister Pavel Mertlik has warned against risks connected with the planned purchase of 36 supersonic aircraft for the Czech Air Force. In an interview for the Czech daily MLADA FRONTA DNES, he says that the economic benefits from the accompanying offset programmes may not live up to expectations. He is also worried about the immense burden on the state deficit.

CSOB/IPB merger finally approved

The Czech anti-monopoly authority has finally approved the acquisition of the IPB bank by the CSOB bank last June. Following forced administration imposed on IPB by the Czech National Bank to prevent IPB from bankruptcy, the bank was promptly sold to CSOB. The purchase has made CSOB the largest bank in the country, gaining more than 30-percent of the market, a dominant position in mortgaging, and a significant share of the pension insurance and leasing market.

Temelin to go on-line again...

The controversial Temelin nuclear power plant is to be brought on-line again by the end of this week. A spokesman for the plant said that the faults that had led to the a temporary shut down had all been repaired.

... as Ed Fagan tries to stop it forever

Meanwhile, the famous American Lawyer Ed Fagan joined the efforts of Austrian anti-nuclear activists to stop Temelin. Stocks in Temelin's owners - the power utility CEZ - plunged upon the news, dragging down the whole PX-50 index by 1.2 percent.

New National Employment Plan

The Czech government has approved a National Employment Plan for this year. Its focal points include support for job creation and re-qualification, protection against illegal employment, improving conditions for small and medium-sized business as well as the development of industrial zones.

The plan updates the National Employment Programme adopted in 1999 which specifies tasks for different levels of state administration - from the government to local councils. Cabinet spokesman Libor Roucek told reporters the programme had helped to reduce unemployment by one percent, bringing down the figure to 8.9 percent for the year 2000.

New way to evade taxes - pipe tobacco in cigarettes

After large scale fraudulent transactions with oil and alcohol, Czech importers have found another way to profit from different VAT rates on similar products. The new trick is that tobacco importers declare the commodity as pipe tobacco but use it for producing cigarettes. While the VAT on cigarette tobacco is 22 percent, that on pipe tobacco is only 5 percent.

Philips to build new plant in Moravia

The Dutch electronics giant Philips is considering building a TV screen production facility in the Czech Republic. If the plan materialises, it would be the third biggest foreign direct investment project in the Czech Republic. The most likely locations for the new factory, which would employ some 2000 people, are the Moravian city of Brno and some other locations in central Moravia. Phillips is currently putting the finishing touches to a large production facility in the Moravian town of Hranice.

Beef consumption falling for years

Beef consumption in the Czech Republic has decreased by a third over the past five years, falling to 208 tonnes of live weight in 2000. For this year, the Ministry of Agriculture predicts a further drop to 181 tonnes. Pork consumption is also falling, although at a slower rate than beef.

CSA to purchase brave new machines

The Czech national airline carrier, Czech Airlines or CSA, is to buy two new Boeing 737 aircraft in March. One of them will be deployed on regular lines, the other will be used for charter flights. The new purchases will bring the number of airplanes in the airline's fleet to 30. As of April, CSA will be fully integrated into the international airline alliance Sky Team. It will coordinate its flight schedule with its partners and interconnect its frequent flier program with theirs.

UN report: Czechs will catch up with the West in 10-15 years

According to a report compiled by the United Nations European Economic Commission, the economic gap between East and West Europe is the widest for decades. The recessions that hit post-communist countries in Central and Eastern Europe in the early 1990s have gradually been overcome as these countries transform into free market economies. But, the report, says, it will take many years for the countries to catch up with the poorest states in the EU. This process could take 10-15 years for the Czech Republic, and 20-25 years for fellow front-runner EU candidate countries, Hungary and Poland. Ivan T. Berend is the author of the study, and my colleague Dita Asiedu spoke to him last week from Los Angeles.

Skoda Auto loses contract with Cuba

And before we go, the Czech car maker Skoda Auto has lost a lucrative contract to supply several thousand cars to Cuba as taxis. The weekly magazine Tyden reported that the potential deal was mediated by members of the Czech Communist Party, but Germany's Volkswagen, which controls Skoda, stepped in and terminated it.

Average age of Czech cars: 13.5

And just a few more words about the auto sector: the average age of cars on Czech roads decreased slightly in 2000, to 13.5 years. The number of cars on the road, however, remains the same and stands at nearly 3 and a half million.