Business News

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In today’s business news: The prime minister says that a German nuclear phase-out could increase domestic energy prices by up to 30 percent, Czech airlines is to further cut its number of destinations along with its staff, the Swiss commodity giant Glencore is set to buy up the Czech food and chemicals conglomerate Setuza, more than half of all Czech households are not able to save any money, and two new wi-fi trams are being introduced in Prague.

Prime Minister speaks on consequences of German nuclear phase-out for Czech energy sector

Temelín nuclear power plant
Prime Minister Petr Nečas said on Wednesday that according to the Czech government’s tentative estimates, a nuclear phase-out in neighboring Germany could lead to an increase in electricity prices of up to 30 percent. He added that this would have a noticeable impact on the country’s industry sector and its ability to compete with other economies. Mr. Nečas stressed that this was only a preliminary estimate for the year 2022, the year by which Germany plans to abandon nuclear power entirely, and that it only would apply if the construction of two new reactors at the Temelín plant would not yet have been completed. However, when seven reactors that were built before 1980 were switched off in Germany in March in a reaction to the nuclear disaster in the Japanese Fukushima, Czech electricity prices rose by nearly ten percent.

Czech Airlines to further cut staff and limit destinations

Czech Airlines will continue cutting its expenses over the next two years. Along with further reducing the number of its aircraft, the company will also decrease its destinations from 60 to about 40 to 45. Czech Airlines director Miroslav Dvořák said that these steps are being taken in order to speed up the company’s effort to cut its debt. He added that the measures will go hand in hand with cuts in staff; some 700 of the company’s 1780 employees are expected to be made redundant or be transferred to the newly formed sister company, Czech Aeroholding. Czech Airlines will also expand its internet presence and sales.

Swiss commodity giant Glencore to buy up bankrupt Setuza

Photo: Jan Rosenauer
The Swiss company Glencore, the world's leading integrated producer and marketer of commodities, will buy the Czech food and chemicals conglomerate Setuza, the country’s biggest producer of food and chemicals. According to the daily Mladá fronta Dnes, Glencore will buy up the bankrupt Setuza for 1.12 billion Czech crowns, or about 45 million euro. Glencore will be purchasing the company’s oil pressing plant in the north Bohemian Ústí nad Labem, its Borsay oil refinery, and its real estate, as well as the company’s registered trade mark Lukana Oil.

The government in 2007 accepted a settlement of 1.1 billion CZK from Setuza, which owed the state 4 billion CZK. Its former owners were linked to a number of controversial businessmen, including Tomáš Pitr, who was found guilty of large-scale tax fraud.

Over half of Czech households not able to save any money

Foto: Barbora Kmentová
According to a survey by Ipsos Tambor, 54 percent of Czechs are not able to put aside any savings. Nearly half of all households in the Czech Republic spend their entire income on living expenses and cannot save any money at the end of the month. About a third is able to at least save 1000 crowns, about 40 euros, each month. Only ten percent save 5000 crowns, or about 200 euros, every month. The survey also revealed that those with a higher level of education are more likely to save money or invest. Nearly a half of those who do set aside savings do so in the form of savings accounts, state-subsidized building savings accounts and similar banking products. A fifth pay their savings into a regular checking account and only about a tenth of the population invests in shares, bonds or stocks.

Two new wi-fi trams to be added to Prague’s tram fleet

Photo: CTK
Two new trams offering free wireless internet will be operating in Prague starting Friday. The cars, of the ForCity model produced by Škoda Transportation, are marked with a Wi-Fi sticker and will be used on numerous tram lines across the city. Information on where they are currently in use is available online. Škoda Transportation plans to introduce one more tram with free wireless internet in the next weeks. The introduction of wireless internet on trams will be in a testing phase until the end of the year; the company plans to assess the use of such trams by the end of the year. The service is financed by ads for the company Rencar, which sells advertisement space in Prague’s public transportation system.