Business News

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In Business News: The Czech Statistical Office revises downward its estimate for Czech economic growth; the Chamber of Deputies approves a bill cutting politicians’ salaries; the Czech Republic could increase its contribution to the International Monetary Fund; Citibank attempts to make inroads on the Czech retail banking market.

Czech economy grows by 1.0 percent

The Czech economy has improved, growing 1.0 percent the Czech Statistical Office confirmed on Thursday, a slight downward revision from the earlier estimate of 1.1. Year-on-year Czech GDP rose 2.8 percent in the third quarter. Last month, the Finance Ministry and the central bank both revised their growth forecasts for 2010 up to 2.2 and 2.3 percent, respectively, from a previous 1.6 percent. But both institutions said they expected a slowdown in 2011 due to the government’s harsh austerity measures designed to mend the country's ailing public finances. Observers confirmed that growth had largely been spurred by investment, together with exports, but warned that increased investment was tied to the solar energy boom, expected to drop quickly in the face of government measures.

Kalousek: Czech Republic could increase IMF contribution

Miroslav Kalousek
The Czech Republic could increase its contribution to the International Monetary Fund (IMF) under certain conditions, Czech Finance Minister Miroslav Kalousek told journalists in Brussels after a meeting of EU finance ministers on Tuesday. The possibility of raising contributions paid by EU member states to the IMF is being discussed in connection with the current crisis in the eurozone. Mr Kalousek said he could imagine the Czech Republic raising its contribution but only provided it was not direct payment. The only possibility, he said, was using foreign currency reserves of the Czech National Bank, something the bank would have to sanction. Mr Kalousek cited the situation last year when the Czech National Bank provided a loan of about 25.1 billion crowns to the IMF in light of the economic crisis. The amount was a part of a broader package on which G20 countries agreed in April 2009.

Lower house approves five percent cut for legislators

On Friday, the lower house passed a bill to reduce salaries for legislators, judges and state attorneys by five percent - a bill that the opposition Social Democrats have warned will probably not make it through the senate, where they hold a majority. The party wants to return the bill to the Chamber of Deputies, coming out against the planned decrease in state attorneys´ pay. However, the lower house can override the Senate´s veto in a new vote. It is not clear whether the law will come into force as of January 1, 2011. Besides cutting salaries, the proposed bill will strip legislators of the right to free public transit. Under the bill, politicians´ wages would remain reduced for three years.

Citibank to try and make inroads in Czech retail banking market

The Citibank banking group has announced it is planning to try and make new inroads into the Czech retail banking market. The head of Citi’s retail banking unit, Bhaskar Katta, said in an interview for Lidové noviny that Citibank was communicating with around 1,000 firms with a large number of employees, to whom the bank wanted to offer its services. Citibank was the first bank on the Czech market to close down branches in reaction to the global financial crisis, four out of nine last year. Mr Katta indicated, however, that some continuing branches would soon double the number of employees to be able to better serve new clients.

Press: PM Nečas threatens to quit over environmental clean-up tender

Petr Nečas, photo: CTK
Prime Minister Nečas this week threatened to resign if the coalition government approves a huge tender to clean up environmental damage from the communist era, Lidové noviny reported. Mr Nečas signalled that intention to the leadership of his party the Civic Democrats, but neither he nor other senior members would confirm the news, the paper said. It claimed that the prime minister thought that so many doubts have been raised about the tender it could damage the government’s credibility, regardless of whether any corruption were to actually take place.

Czech, US governments sign declaration on nuclear energy cooperation

Temelín nuclear plant
Earlier this week, the Czech industry and trade minister, Martin Kocourek, signed a declaration on cooperation in nuclear energy with US government officials in Washington. The declaration should foster greater Czech-US nuclear cooperation in both the commercial and scientific areas, Mr Kocourek said. The agreement is linked to a bid by the US-based firm Westinghouse for a multi-billion deal for the construction of new blocks at the Czech nuclear plant Temelín. Czech and American officials have also discussed intensifying trade between the two countries.