In Business News: the IMF has advised the Czech government against making further budget cuts in view of the country’s worse-than-expected economic development; Finance Minister Miroslav Kalousek has questioned the financial wisdom of expanding the Temelín nuclear power plant; Czech arms producer Česká zbrojovka has won a multi-million crown tender to supply 50,000 pistols to the Egyptian interior ministry and the Czech liqueur maker Rudolf Jelínek posted its first loss since 1998.
IMF advises Czech government against further cuts
Photo: Štěpánka Budková
The IMF has advised the Czech government against making further budget cuts in view of the country’s worse-than-expected economic development. In a report released this week, the institution says the government should hold further steps to stabilize public finances until economic growth is renewed. If the situation should further deteriorate the IMF says the government should take steps to weaken the value of the crown in order to encourage spending and support the country's export sector. The Czech Republic has experienced a record-breaking six successive quarters of economic contraction. This year, the central bank expects the economy to contract by 0.5 percent, down from a previous forecast of 0.3.
Finance Minister questions Temelín’s expansion
Temelín nuclear power plant, photo: Filip Jandourek
Finance Minister Miroslav Kalousek has questioned the financial wisdom of expanding the Temelín nuclear power plant in south Bohemia by another two reactors. In an interview for the economic daily Hospodářské noviny Mr. Kalousek said the plans to build another two reactors had been calculated on the basis of higher electricity prices than the present ones and moreover noted that the government had hoped to build the reactors at a significantly lower cost than was being offered by the two firms competing for the project.
PM sticking to his guns
Petr Nečas, photo: Filip Jandourek
Although critics have previously warned of possible economic losses, this is the first time that a government official has openly questioned the future of the Temelín expansion project. Prime Minister Petr Nečas on Friday played down the finance minister’s words, saying it was his personal opinion and not the stance of the Czech government. The PM said he could not imagine the industrially-oriented Czech Republic functioning without the two additional reactors after 2025 and stressed that they were essential to the country’s energy stability..
Czech arms producer wins tender to supply pistols to Egypt
Illustrative photo: CTK
Leading Czech arms producer Česká zbrojovka has won an international tender to supply 50,000 pistols to the Egyptian interior ministry, a multi-million crown deal that may be followed by a lucrative contract for the delivery of several hundred Scorpion submachine guns to the country, the company’s CEO Lubomír Kovařík told the CTK news agency. Česka zbrojovka is also in talks to supply rifles, automatic rifles and pistols to Iraq. The Iraqi side is to take a decision on the contract this year. Česká zbrojovka is one of the country’s leading arms producers with last year’s sales exceeding 2 billion crowns.
Rudolf Jelínek posts losses in wake of methanol scandal
Illustrative photo: Kristýna Maková
Czech liqueur maker Rudolf Jelínek posted its first loss since 1998 last year owing to the methanol scandal in September and the government-enforced ban on spirits that accompanied it. The company's representative Josef Brabec said Jelínek's losses amounted to 15.9 million crowns in 2012. In the pervious year the firm made a net profit of 22.6 million. The methanol affair considerably reduced the demand for spirits in the Czech Republic, particularly for rum and vodka. The sale of spirits on the Czech market dropped by 10 percent in 2012 as a result of the scare. Rudolf Jelinek is an exclusive distributor of Puschkin vodka and the fruit liqueurs Berentzen.
