In this week's Business News: the Czech government has decided to end state subsidies for school milk programmes; why Czech banks are cutting mortgage rates and why the country is being flooded by ever cheaper imported Chinese shoes; new data from the European Foundation for the Improvement of Living and Working Conditions suggests that Czech worker pay has fallen by 1.3 percent in the last year and a a key member of the Czech National Bank’s board has said that he does not recommend that the Czech Republic adopt the Euro in the near future
Government ends school milk subsidies
The Czech government has decided to end state subsidies for school milk programmes, according to the Ministry of Agriculture. The move comes as various milk providers threaten legal action against the government for potential lost revenue. Milk producers argue that they have invested around 100 million in the scheme, for example providing milk-vending machines and refrigerators to schools. In the future, school milk will be partially subsidized by EU funds. The decision was taken in order to reduce spending at the ministry and the move will save an estimated 60 million crowns out of proposed cuts of five billion.
Czech banks cut mortgage rates
Cheap Chinese shoes “flooding” Czech Republic
The Czech Republic is being flooded by ever cheaper imported Chinese shoes, according to the Czech Shoe and Leather Goods Association. Last year, the country received around 86 million pairs of shoes from China, with an average import price of only 30 crowns. This has caused Czech shoemakers to warn that such a volume of imports is threatening domestic production – in the last seventeen years, Czech production has fallen more than tenfold, from 71 million pairs in 1990 to around 5.1 million in 2007. The Association also notes that Chinese imports are now often competing in terms of quality as well as price. However, the sheer numbers of imports have also led to some unusual calculations – around 15 pairs of shoes per person per year, which means that in fact, much of the imports passing through the Czech Republic are being exported on to other destinations.