Finance Minister pushes out new package
Czech Finance Minister Eduard Janota is a man who seems unable to take a break. Hard on the heels of pushing the 2010 budget past reluctant politicians, he has raised the prospect of another, rather unappetising package, for them to digest. Mr Janota is now calling for a follow-up 2011 budget to be thrashed out. He says a combination of more progressive ― read higher ― direction taxation and Value Added Tax and a further round of spending cuts should curb the budget deficit below next year’s target of 163 billion crowns. While some parties say the 2011 budget should be worked out by the caretaker government others point out there are thin chances of getting such measures agreed before elections in the middle of the year.
Central bank seeks to correct misconceptions
Meanwhile, the Czech Central Bank is leading a campaign to correct Western media coverage of the region. At the height of the financial crisis, the central Bank was outspoken in its attacks on the tendency to lump all Central and Eastern European countries in the same bag for their perceived risks of ballooning state debt and private banking sector collapse. This week Czech deputy governor Miroslav Singer fired off an angry reprimand to the Financial Times pointing out that the mostly foreign-owned Czech banks are providing cash to other banks in their financial groups rather than taking it. And the Wall Street Journal revealed how Mr Singer now has the habit of displaying a graph whenever possible pointing out how the banking sector in major West European countries is in a far worse mess than in this region.
Tatra cuts a fifth of its workforce
There has been more bad news on the jobs front. The famous truckmaker Tatra has announced that it will lay off 550 workers, around a fifth of its total workforce by the end of the month because of a slump in orders. Tatra expects its turnover this year to be down 40 percent compared with last. There have also been signals from French parent company Alstom Power that jobs at its Brno turbine plant are in danger. The Brno plant employs 650. Figures released this week show that Czech unemployment climbed to 8.6% in September with more than half a million now looking for work.
Hooters restaurant to make Czech debut
The landlocked Czech Republic is set to be the Central European embarkation point for the famous US beach-style restaurant, Hooters. A local businessman has done a deal with the American parent company to open franchises in the Czech Republic and Slovakia. The appropriately named Hooters is famous for its well proportioned and outgoing waitresses who play a key role in the success of the restaurant chain sited in almost all big US towns and cities. The Czech businessmen who landed the franchise points to the concept’s success in Germany where they are now experiencing a boom.
The slow burning case
And finally, the European Commission this week cleared an almost 10 year old deal over the ownership of Prague heating company, Pražská Teplárenská. It’s not that things move slowly in Brussels, but the company’s owners belatedly realised they did not get clearance from competition watchdogs when the deal first came into effect and moved to tidy up the situation. But the move wrongfooted a lot of the local media, which saw the deal as something new rather than confirmation of the status quo.