Business News

Tosovsky steps down

The Czech National Bank governor, Josef Tosovsky, resigned his office on Tuesday, the same day he was appointed chairman of the Financial Stability Institute of the Bank for International Settlements, effective December 1st, 2000. The resignation came just weeks before a new law that will significantly limit the central bank's independence is due to come into force. Tosovsky has been in office for 11 years. Although seemingly quiet and inconspicuous, he was one of the main figures that shaped the Czech economy during its transition from a communist-model, centrally planned economy to a free market. Economic analyst Jan Sykora from Wood and Company, evaluates the period: New government agency to be founded

The Ministry of Industry and Trade is to establish a new agency, CzechIndustry, that will provide support to troubled Czech companies. Applicant companies will present a restructuring project to the agency for evaluation. If the agency approves the project, it will provide a subsidy to the company amounting to around ten percent of the total costs of the project. CzechIndustry, which will have about a dozen employees and will use money from EU funds, will join its successful sisters CzechInvest and CzechTrade, responsible for attracting direct foreign investment and Czech exports, respectively.

IMF urges Czech govt. to economise

In its regular study of the Czech economy, the International Monetary Fund has urged the Czech government to immediately start structural reform of public finance in order to curb a widening deficit that threatens to undermine economic recovery. Macroeconomic analyst Radomir Jac of Commerzbank confirms that the situation is quite serious: As a remedy, the IMF suggests cuts in low priority expenditures, such as support for state enterprises, infrastructure investments that are likely to yield low returns, and social benefits that discourage people from seeking jobs. The IMF also recommends tax-rate changes, and in the long term, it stresses that further reform of the social security system is unavoidable.

Is the Czech economy competitive enough for the EU?

On Sunday, European Commission President Romano Prodi noted that he believed six countries would be ready to join the European Union in 2003. The Czech Republic is believed to be one of them. However, there have been voices warning that despite the preparedness of the country in various areas, Czech companies may not be able to withstand competition once inside the EU. Political commentator Vaclav Zak: On the other hand, the Czech chief negotiator for EU accession, Pavel Telicka, denies the existence of such a danger: