Business News


In this week’s business news: Prime Minister Petr Nečas announces estimated additional cuts of 26 billion crowns to the state budget; a Czech MEP has praised the country’s refusal to join the fiscal compact; the Agriculture Minister is set to dismiss the CEO of a state-owned brewery; the country’s nuclear energy exports reach a record level; and, a poll finds that the majority of Czechs consider the current economic situation poor indeed.

Prime Minister announces estimated additional cuts of 26 billion to state budget

Photo: Barbora Kmentová
Prime Minister Petr Nečas has announced that the government will have to save an estimated additional 26 billion Czech crowns this year. He added that he had based this estimate on the finance ministry’s GDP growth prediction of 0.2 percent for 2012. A more recent forecast of the country’s economic output that the Czech National Bank released on Thursday expects the economy to stagnate in 2012. Previously, the bank had predicted a growth of 1.2 percent. Commenting on the Finance Ministry’s estimate, which was released on Tuesday, Finance Minister Miroslav Kalousek made it clear that due to the uncertainty in the eurozone, a recession could not be ruled out. For next year, the ministry expects growth of 1.6 percent.

In October, a preliminary state budget deficit of 105 billion Czech crowns was passed. It was based on an assumed GDP growth of 2.5 percent but will have to be adjusted to reflect the lower-than-expected numbers.

Czech MEP praises Czech refusal to join fiscal compact

Jan Zahradil
Czech MEP Jan Zahradil, of the Civic Democrats, has said in an interview with the daily Hospodářské noviny that the Czech Republic had not lost anything by not joining the EU’s fiscal compact. By doing so, the country had sent the signal that not all EU states are ready to unconditionally support a transfer of powers from the national to the European level, he said. He added that the country should also take steps to free itself from pressure to join the common currency zone, since the conditions under which the Czech Republic had committed to joining the eurozone had changed.

The Czech Republic and the UK were the only two EU member states to not sign off on the fiscal compact, which is aimed at establishing tighter fiscal discipline across the EU.

Daily: Agriculture Minister set to dismiss CEO of state-owned brewery

Agriculture Minister Petr Bendl is set to dismiss Budějovický Budvar brewery CEO Jiří Boček, the daily Hospodářské noviny writes on Friday. Mr. Bendl has ordered an audit at the brewery and has criticized Mr. Boček for delays in a trademark dispute with the American brewery Anheuser-Busch. The minister himself has declined to comment on what he has labeled “speculation” on whether he will remove the state-owned brewery’s CEO from his post. Prime Minister Petr Nečas said that the cabinet had not yet discussed the matter but that no decision would be made until he has a report on the brewery.

Anheuser-Busch and Budějovický Budvar have been leading a fierce legal battle for decades. The term Budweiser comes from Budweis, the German name for České Budějovice, the South Bohemian town where Budvar is produced.

Czech Republic exports record amount of nuclear energy

Photo: Archive of Radio Prague
The Czech Republic’s nuclear power plants exported record levels of energy in 2011, when nuclear energy exports reached the highest level in the country’s history. According to preliminary figures from ČEPS, the country’s sole transmission system operator, last year’s energy exports reached 17.4 TWh, 1.2 TWh more than the previous record. The biggest purchaser of Czech nuclear energy was Germany, which bought more than half of the exported energy, followed by Slovakia and Austria. Experts say that last year’s export record of Czech nuclear power is connected to the nuclear power phase-out in Germany.

Poll finds majority of Czechs consider current economic situation bad

Nearly two thirds of Czechs see the current economic situation as negative. In a poll conducted by the Public Opinion Research Centre (CVVM), some 42 percent answered that the country’s economy was “bad” and 20 percent described the situation as “very bad”. Only seven percent of those polled said the economy was in “very good” shape. The survey found that young people between 15 and 19 and university graduates are among the more optimistic, while those who are over 60 or retired tend to see the situation pessimistically. In addition, the poll suggests that voters of right-wing or center-right parties are more likely to consider the economy sound than those who would give their vote to the Social Democrats or the Communists.