Business News

Czechs impose ban on French beef imports over BSE risks

The Czech Republic on Tuesday imposed an import ban on French and Portuguese beef amid increasing outbreaks of BSE, or Mad Cow Disease, in Europe. The ban, which applies to beef, beef products, bone-meal products and live cattle, follows a decision by veterinary officials. It takes effect immediately. The ban was imposed despite the fact that France and Portugal have not exported any beef to the Czech Republic this year. The Czech authorities explained that the measure was taken in order to prevent importers from benefiting from the currently low prices in the two countries.

OECD foresees continuing growth in Central Europe

The Czech Republic, Hungary and Poland will continue to experience GDP growth over the next two years, although high unemployment and the threat of inflation will persist, the OECD said in its latest semi-annual economic outlook issued in Paris. The Czech Republic emerged from a long economic slump in 2000, with a 2.5 percent growth in real GDP predicted for the year, and 3.2 percent for 2002. Although inflation will remain low, with the consumer price index rising from the present 2.1 percent to 4.4 percent in 2002, Czech unemployment is expected to remain at around nine percent over the next two years.

The OECD has urged the Czech cabinet to tighten its fiscal policies after a sharp rise in the overall state budget deficit this year. The Czech Republic, unfortunately, cannot compare to the sustained economic growth of around 5 percent experienced by Poland and Hungary which is expected to continue at the same pace in the next two years. On the other hand, Poland has to deal with high unemployment of around 15 percent and Hungary's inflation rate is expected to exceed 9 per cent in 2000.

Every tenth CD is a pirate copy - newspaper

According to the newspaper Lidove Noviny, every tenth audio CD sold in the Czech Republic is pirated, and losses are estimated in the range of tens of millions of Czech crowns per year. The Czech branch of the International Federation of the Phonographic Industry has recently conducted a campaign against piracy. It has filed lawsuits against 20 firms that burn CDs illegally. Five of them have gone out of business, while one is to stand trial. The federation claims that some of the country's official CD producers are involved in the illegal business as well. Their products, however, are intended mainly for foreign markets. Although the number of CDs and other audio media sold in the Czech Republic is decreasing, the Federation is convinced that the situation here is not much worse than in other countries.

In the past, Lidove Noviny writes, most pirated CDs were imported to the Czech Republic from other countries, such as Ukraine, Bulgaria and Poland. Now, however, the illegal burning firms pose the greatest danger to profits for the recording industry. The newspaper arrives at the conclusion that, considering the current price of a new CD in the Czech record shops, nearly 15 USD, the demand for pirate copies is hardly likely to die away.

Economic growth drives foreign trade deficit to record highs

The Czech Republic's foreign trade deficit has plunged to 400 million USD in October from a mere 150 million in October 1999. The passive balance was mainly in the category of raw materials, chemicals and semi-finished products, with fuels accounting for more than a half of the deficit.

For the first ten months of this year, the Czech foreign trade deficit exceeded 2 billion USD, 1.5 billion more than in the same period last year. The end-year deficit is expected to reach as much as 3.6 billion USD.

The record growth in the trade deficit in October was driven by the continuing economic recovery. According to the Czech Statistics Office, the growth of the deficit in October was driven by continuing economic growth which stimulates higher demand for machinery and fuel, rather than household consumption.

Telecom's conditions for interconnection with other operators

The Czech monopoly fixed-line operator, Czech Telecom, has published the conditions for interconnection with other operators, which is a fundamental prerequisite for competition on the market. The so-called Reference Interconnection Offer governs the conditions for the interconnection of the public telecommunication networks of Czech Telecom and the competing operators which will be allowed to enter the market as of January 1st.

The non-existence of such conditions has been an obstacle for newcomers, preventing them from working out customer price lists, and commentators say it's no surprise that Telecom has waited until the last moment to publish the conditions.

The document includes information from the procedural, technical, commercial and legislative areas. Telecom claims that it wants to make negotiations for the interconnection of telecommunication networks as smooth as possible.

Czech Telecom to change tariff system

Meanwhile, Cesky Telecom said it would change its tariff system as of January to harmonize its fee structure with common European standards. Czech Telecom's spokesman Vladan Crha told Reuters that the monopoly Czech fixed-line operator will stop charging its users by impulses of different length, replacing the system by charging through more transparent time periods. Local calls will be charged per minute, long-distance calls after 30 seconds and international calls per second.

The new prices that will come into effect from next year, when the Czech public fixed-line market opens, will be announced later in November or in December, Crha added. The telecommunications regulatory body allowed Czech Telecom earlier in November to raise its aggregate price index by 1-4 percent next year.

With nearly four million telephones in the country, Czech Telecom is the leading telecommunications company in the Czech Republic. In the run-up to market liberalisation, the company has been expanding its data telecommunications products and other value-added services.

Minimum wage rises to 5000 CZK

The Czech government has raised the minimum monthly wage from 4500 to 5000 Czech crowns, an equivalent of 122 USD, effective on January 1st, 2001. Government spokesman Libor Roucek said the government had thus fulfilled a promise it gave in its manifesto, that is to raise the minimum wage above the poverty line. The move will prevent a wide-spread phenomenon where employers pay the minimum wage and the state has to compensate for the difference by social welfare. The poverty line has been newly set at 3770 CZK a month, which is around 92 USD.

IDET 2001 military fair to focus on European defence and jet fighters

European defence and offset programmes connected with the Czech Republic's purchase of modern jet fighters will dominate the sixth military trade fair IDET 2001 to be held next May, the managing director of the project, Karel Torn, told a press conference. IDET is an international trade fair focusing on defence and security technology as well as special information systems.

According to Mr. Torn, IDET 2001 is expected to be the largest and most prestigious exhibition of defence technology in Europe next year. Its area and number of exhibitors rank it after the biggest specialised defence industry exhibition Eurosatory which is held every two years in Paris.

Last year, IDET hosted delegations from 15 NATO member states and over 350 companies from 25 countries.

Exhibitors will be able to demonstrate some of their products, especially vehicles and aircraft, in a special polygon and the Brno airport, respectively.

The IDET military fair is intended primarily for experts, however, it will be open to everyone over the age of 16. There will also be an accompanying programme, including conferences and seminars on issues such as weapon systems for the 21st century and security of computer networks. A new feature will be a special website that is planned to develop into an Internet portal mapping the defence and security area in Central and Eastern Europe.