Business News

Central bank

In Business News this week: The central bank raises interest rates for the second time this year in an attempt to keep a lid on inflation; Czech power giant CEZ is seeking to have a deal between the MUS mining company and E.ON banned; three quarters of Czech firms are failing to make their annual income statements public; the generation of wind power increases, but still supplies few households; and a new EU directive means Czech tour guides will face foreign competition for the first time.

Central bank increases interest rates for second time this year

The Czech National Bank raised interest rates by a quarter point this week, bringing the benchmark two-week repo rate to 3.00 percent. That rise puts the benchmark rate at its highest level for five years - though it still remains the lowest in the European Union. The move had been widely forecast, and most retail banks had already raised their lending rates in anticipation of Thursday's announcement. The increase - the second quarter-point hike in two months - is aimed at keeping inflation under control. Analysts say it may not be the last such interest rate rise this year.

CEZ attempting to block MUS-E.ON deal

The Czech power giant CEZ is seeking to prevent the MUS mining company from developing a large coal-fired power station in north Bohemia with Europe's largest power company E.ON, Mlada fronta Dnes reported this week. CEZ had itself been in talks with MUS on a similar project until last month, and has asked the Czech anti-monopoly office to ban the deal, the paper said. It argues that if MUS includes the important Vrsany brown-coal mine in the project there would not be sufficient brown coal available to other customers.

Czech firms failing to comply with law on publication of annual statements

Czech firms are rather slack when it comes to making their yearly income statements public. In fact up to three-quarters violate the law by not supplying such data to the Company Register, Hospodarske noviny reported this week, quoting a study by Dun & Bradstreet. The fine for not complying is a paltry CZK 20,000 (less than USD 1,000) and many prefer to pay the fine and keep their results to themselves.

Wind power on increase but still negligible in terms of consumption

Photo: Commission European
Wind power plants in the Czech Republic increased output by 132 percent in 2006 compared to the previous year's figures, the Energy Regulatory Office said this week. Despite this rise, however, wind power meets just a fraction of the country's energy needs, covering the annual consumption of around 14,000 households. As for this year, the launch of new sources combined with relatively windy weather has led to a rise of 40-percent in output in the January to June period.

PwC: Czech Republic services sector fourth most attractive among emerging markets

The Czech Republic is the fourth most attractive emerging market when it comes to investment in the services sector, according to a study carried out by PricewaterhouseCoopers. However, the country figured rather lower in the field of industry, ranking 17th among emerging markets.

Tour guides to face foreign competition for first time under EU directive

Photo: CTK
Czech tour guides are set to face international competition for the first time, under a new European Union directive liberalising the tour guide industry. Foreign guides will have the right to show groups of visitors around Czech sights from October, while Czech guides will be allowed to work in other EU states. Hospodarske noviny reported, however, that a special Czech state qualification will still be needed to be a guide in buildings not open to the public, such as the interiors of castles like Karlstejn near Prague.