Business News
CEZ stock damaged by German appeal to shut Temelin
The Prague Stock Exchange suffered a shock on Monday when the German government called on Prague to close down the Temelin nuclear power station in South Bohemia, citing safety concerns. Press coverage caused the stock of the power utility CEZ, which owns and operates Temelin, to plunge by more than 20 percent on the Prague Stock Exchange to around 67 crowns 70. CEZ also pulled down some other blue chip shares. The stocks later gained some of its losses back.
CEZ estimates the cost of shutting down Temelin at 115 billion crowns or 3 billion USD. According to economic experts, part of the losses would have to be covered by the state to prevent CEZ from going bankrupt before its planned privatisation.
Budget expenditures to grow by 45 billion
The deputy finance minister, Eduard Janota, estimates state expenditure in 2002 will grow to 730 billion crowns, up 45 billion on this year's budget. More than a half of this amount will be spent on pensions and social welfare. The 2002 budget is expected to end with a deficit of 10 billion crowns. The final figures will be set at a government session next week.
Czech government hopes to raise 500 million USD on 3G licences
The Czech government hopes to raise more than 20 billion CZK (or around half a million US dollars) by selling licenses to operate UMTS or third-generation mobile phone networks. The Czech Telecommunications Office has offered licenses to the three GSM operators currently operating in the Czech Republic, for 6.7 billion crowns each.
Although the three operators have shown an interest in acquiring the licences, doubts have been raised about the cost of the licences. The operators had previously indicated that they would be willing to pay between only one and three billion crowns for the licences, due partly to the slowdown in the global telecommunications market.
Should the current operators fail to accept the offer, the Czech Telecommunications Office would hold an auction to sell the three licences plus one extra.
UMTS systems allow mobile phones to be used for a variety of services including video transmissions and access to the Internet.
Three new FWA licences granted
Staying with telecommunications, and the Czech Telecommunications Office has granted three licences for the Fixed Wireless Access networks in the 3.5 GHz band. The winners, SkyNet, Eurotel and Czech On Line, each will pay 20 million CZK or more than half a million USD for the licence. While some companies already operate this type of network for data transmission, these three licences are intended solely for voice services and should increase competition in the fixed-line telecommunications sector.
France to boost trade with Czech Republic
A delegation from the French Senate, which included the head of the French EU Integration Committee, Senator Deneux, paid a state visit to Prague this week. One of the main items on their agenda was boosting economic ties between the two countries. France hopes to become the the Czech Republic's second largest trade partner. Germany currently is the country's largest trade partner. Pavla Berlikova from the Czech government's CzechTrade agency told us the details of the trade relations between the two countries. Prague selected for EU-sponsored pollution reduction project
The Czech capital Prague is one of 19 European cities to receive support from EU funds for public transport enhancement projects. Of the 19 cities, 14 are the EU member states, while the other five are Central and East European candidate countries. The EU has allocated 50 million euros to be divided amongst the cities to finance projects on the reduction of pollution caused by public transport. The results of the pilot projects will be available to other cities across Europe as recommended ways of dealing with pollution.
Environment ministry cooperates with European businessmen
The Czech environment ministry has signed a cooperation agreement with European investors. The European Czech Forum, a non-profit organization representing investors from EU countries, will provide the Czech environment ministry with expert advice on several environmental issues. The Forum was established by the chambers of commerce of five EU member countries with financial support from the Union and represents investors who are interested in the faster integration of the Czech Republic into European structures.
OECD study: banking sector in good shape, deficit is a problem
The OECD has published its regular study of the Czech economy. The study is generally very positive, praising the country's significant improvement in the banking sector, which is due mainly to the now-completed privatisation of state-owned banks. However, the OECD still sees it necessary to improve the supervision of the banking sector exercised by the Czech National Bank. The study also appreciates the quality of newly-provided loans and a decreasing volume of overdue loans in the banking sector.
As the greatest concern, the OECD cites the persisting problems in public finance. The study criticises the government for what it says is an excessively relaxed fiscal policy and a growing deficit in public finances which, together with the current account deficit, could endanger the economic stability of the Czech Republic. Economic analyst Jan Sykora of Wood & Company stock broker is convinced that the OECD study represents a serious warning. The problems with the growing deficits in public finances have been a long term issue and likewise, it will take a long time to improve the situation. The question of course, is how long...
