Business News

In Business News this week: the EC recommends Czechs to slash deficit in public finances; Ceske Aerolinie records loss of 175 million crowns in the first half of this year; the Czech government launches privatisation of Letiste Praha; the energy power giant CEZ is to build power station in Vietnam in deal worth 3 billion dollars; and the number of Vietnamese doing business in Czech Republic is on the rise.

EC recommends Czechs to slash deficit in public finances

The European Commission on Wednesday recommended that the Czech Republic cuts its budget deficit to under 3% of GDP by 2008. The Czech Republic could face sanctions including the suspension of EU aid, if it fails to do so. Experts from the Czech Ministry of Finances say this is a realistic target. The deficit in public spending is expected to reach 4% this year but the government's reform plan recently approved by Parliament should bring next year's deficit down to 2.95% of GDP.

Ceske Aerolinie records loss of 175 million crowns in the first half of this year

The Czech national airline Ceske Aerolinie recorded losses of 175 million CZK (nearly 9 million USD) for the first six months of this year. These losses were 77% lower than for the same period in 2006. The company, 90% of which is owned by the state, currently stands 182 million CZK in profit, having made more than 350 million CZK in July. Analysts predict that the firm could make a slight overall profit in two years' time, if it sells off its cargo terminal and catering services.

Czech government launches privatisation of Letiste Praha

In related news, the Czech government launched the privatisation of Letiste Praha, the operator of Prague's Ruzyne Airport, on Wednesday. The Transport Ministry's proposal for the state-run company to be transformed into a joint-stock company in eight months' time has been approved. A strategic partner is expected to be found by the end of 2008. Letiste Praha ranks among the most successful state-owned companies, with net income amounting to nearly 1 billion CZK in 2006.

CEZ to build power station in Vietnam in deal worth 3 billion dollars

The Czech energy giant CEZ, has signed a deal to construct a power plant in Vietnam, the value of which is thought to be some 20 billion crowns (3 billion USD). The coal-powered plant with an estimated output of 3000 megawatts is to be constructed by Skoda Praha, a subsidiary of CEZ. It is expected to cover one-fifth of the overall energy consumption in Vietnam.

Vietnamese business representatives, who arrived in Prague with their Prime Minister Nguyen Tan Dung, signed the contract on Thursday, along with several other agreements between Czech and Vietnamese firms valued at around 69 billion CZK (3.5 billion USD) in total. In the first six months of this year, the Czech Republic has imported 13 million USD worth of goods from Vietnam, and exported some 90 million dollars worth of products.

Number of Vietnamese doing business in Czech Republic growing

Illustrative photo: archive of Radio Prague

There are some 45,000 Vietnamese living in the Czech Republic, 25 000 of whom do business. The Vietnamese population in the Czech Republic is rising by about 1,000 a year. The majority of Vietnamese people working in the country make a living selling clothes and food at open-air markets. According to the chairman of the Czech Vietnamese Society, Marcel Winter, these markets are expected to disappear in about four to five years to be replaced by brick-and-mortar shops.