Business News


In Business News this week: an extraordinary media intervention by the national bank; Škoda Auto steps up a gear; Green Cards look less rosy; another high speed rail link is mooted; a new contender is linked to Czech Airlines’ sale; and farmland disappears fast from the map.

National bank deals with debt slurs

Macroeconomic news was dominated by an extraordinary attack by the Czech National Bank on the esteemed Financial Times and the Economist. The bank attacked both publications for putting the country in the same bag as other ex-Communist states where large euro loans were taken out and have now become a big repayment problem. The issue hardly exists here, the bank said. It also rounded on The Financial Times for a report making a fivefold exaggeration of foreign bank loans to the country. It said the actual figure stands at around 30 billion euros rather than the stated 151 billion euro.

Scrap incentives boost Škoda Auto production

The introduction of incentives to scrap old cars in some European countries has given Škoda Auto a sufficient boost to reintroduce Friday production of most models from March. Interest in new car purchases has picked up enough in France, Germany and Austria for the Mladá Boleslav-based producer to believe that the five-day week is back for good. Originally, Škoda believed it might have to prolong short time working at plants until the end of June.

Jobs removed from Green Card programme

But signs of the crisis continue. They have prompted Labour and Social Affairs minister Petr Nečas to signal a tightening of the Green Card system for foreign workers. Nečas says he removed vacancies for 30 seamstresses in the high unemployment northern town of Česká Lípa from the list that could be offered to foreigners. During a crisis, hundreds not thousands of jobs could be offered to foreigners, he added. The Green Card system was launched in January for citizens from 12 non-EU states, including the US, Canada, Australia and New Zealand. They can be offered jobs if no Czechs or EU citizens fill them within 30 days.

Munich rail agreement set for signature

Czech and German governments are eyeing up a fast rail link between Prague and Munich. A memorandum saying as much should be signed at the end of March but construction is only likely to start in 2016. The plan, however, relies on the excavation of a long railway tunnel between the Czech capital and Beroun. That is a feat which Czech Railways has shied away from in the past because of the heavy costs.

Air France seen as Czech Airlines suitor

In the sky, the Air France and KLM partnership has emerged as a buyer for state-owned Czech Airlines, according to French business daily, La Tribune. Sources at the Franco-Dutch airline confirmed they are examining whether to make an offer in the ongoing privatisation. But finding cash for a bid could be a problem during the current credit squeeze, the French paper said. Lufthansa and Russia’s Aeroflot are also said to be circling Czech Airlines. Aeroflot is reported by business magazíne, Euro, to have dropped talks with financial groups Penta, PPF and J&T about possible joint bids.

Farmland disappears under concrete

And on the ground, Czech farmland is being eaten faster in the Czech than in most neighbouring countries according to figures from the national statistics office. Between 2003 and 2007 the proportion of land used for farming declined by 1.4 percent to 44.6 percent. Most of it fell victim to new contruction. In Germany and Austria the fall over the same period was less than one percent.