In Business News this week: Finance Ministry and central bank advise against setting date for euro adoption; next year’s budget criticized as “unambitious”; Czech Republic to miss out on 20 billion from EU funds; Spirit sales return to levels seen before methanol scandal; and record numbers of tourists spend expected in Prague for Christmas and New Year.
Finance Ministry, central bank advise against setting euro adoption date
Photo: Tomáš Adamec
In an annual joint report, the Czech Finance Ministry and the Czech National Bank have recommended that the government does not set a date for adopting the euro, the news agency ČTK reported on Friday. The report also advises against entering the European Exchange Rate Mechanism, ERM II. With the exception of participating in the ERM II, the Czech Republic last year met all the requirements for euro adoption, a move envisaged by the country’s accession treaty with the EU. However, top Czech officials say the earliest date the country could join the Eurozone is around 2020.
State budget for 2015 criticized over deficit
Andrej Babiš, photo: Filip Jandourek
The Czech Republic’s budget for 2015, which was approved by lawmakers this week, has come under criticism from the opposition as well as a number of analysts. The budget’s projected deficit should not exceed 100 million crowns, or around 3 percent of the GDP, and Finance Minister Andrej Babiš said the gap could be even lower. However, leaders of the opposition TOP 09 and Civic Democrat parties as well as several analysts have criticized the budget as insufficiently ambitious, arguing the deficit is too high for a period of economic growth. Some commentators have also been critical of the fact that only 35 billion crowns were earmarked for science and research, which is five billion less than in the years of the economic downturn.
Czech Republic to miss out on 20 billion from EU funds
Photo: European Commission
The Czech Republic will this year fail to draw some 20 billion crowns from EU funds, Prime Minister Bohuslav Sobotka told the lower house on Thursday. By the end of September, over 85 percent of the EU’s structural funds allocated for the Czech Republic this year had been drawn, with some 84 billion crowns yet to be paid out. The affected programmes include Environment and Research, Development for Innovations and Prague – Adaptability. The Czech Republic is the least successful of all member states in drawing EU funds. The Czech Regional Development Ministry estimates that over the entire financial period of 2007–2013, the country will fail to draw 40 of the 700 billion crowns allocated.
Spirit sales return to pre-prohibition levels
Photo: Barbora Kmentová
Sales of spirits in the Czech Republic have returned to levels registered in 2011, before the country was hit by a major bootleg liquor scandal, Stock Plzeň, the country’s leading spirits producer, told the news agency ČTK. Spirits sales dropped after dozens of people died in 2012 after consuming methanol-laced alcohol; the authorities then introduced a temporary ban on sales of spirits and tightened the rules for selling alcohol. Stock managers said sales this year have increased by between 7 and 8 percent, mainly in the cheaper spirits segment. The increase has been attributed to a decline in the black market in spirits and the growth of the Czech economy.
Record numbers of tourists expected in Prague for Christmas and New Year
Photo: Zuzana Bayerová
A record 200,000 foreign tourists are expected to spend Christmas and New Year in the Czech capital, according to estimates by the Prague City Tourism agency. Some 120,000 visitors spend the final days of 2013 in the capital. A marked decline in the numbers of Russian tourists will be compensated by increased numbers of visitors from Germany, China and South Korea, the agency said. In total, nearly 5.9 million foreigners visited Prague last year, mainly Germans, Russians, Brits and Italians.
