In Business News this week: the Czech government introduces a major fiscal reform package; power giant CEZ is the largest firm in Central Europe according to Forbes Magazine; there has been an extraordinary increase in car sales in this country, and the McDonalds fast-food chain enjoys a record increase in revenues in the Czech Republic.
Major reform package proposed by Czech Government
The biggest business story this week has been the Czech government's controversial new financial reform package. The proposed reforms include a fifteen-percent flat tax as well as an increase in the lower VAT rate from five to nine percent. There will also be lay-offs in the state sector and social-spending cuts, affecting things like sickness and unemployment benefits. Critics say that the reforms won't make much difference to people's incomes and are not radical enough to reduce the country's budget deficit. The government's proposals will now go before parliament in August or September.
Minister wants to cut spending on transport infrastructure
In keeping with the government's efforts to cut public spending, Transport Minister Ales Rebicek has announced that he plans to reduce the country's transport infrastructure fund by nearly twenty-five percent over the next two years from fifty nine billion Czech crowns to forty billion Czech crowns over the next two years. At the same time, an expert conference held in Prague this week on transport in the Czech Republic concluded that at least one hundred billion Czech crowns or four point eight billion US dollars was needed to maintain and improve the country's transport network.
Forbes Magazine: CEZ biggest firm in Central Europe
Photo: archive of Radio Prague
Czech power giant CEZ is the biggest firm in Central Europe according to Forbes Magazine. The American publication placed CEZ in 453rd place on its list of the 2000 largest public companies in the world, an improvement of almost 200 places on its position in a similar poll conducted by the magazine last year. Record earnings and an increase of nearly thirty percent in CEZ shares are the main reasons behind the firm's improved Forbes ranking.
Sharp rise in sales of new passenger cars
There has been a sharp increase in the sale of new passenger cars in the Czech Republic. Car sales increased by an extraordinary 9.2% in the first quarter of 2007. Altogether 30,105 cars were sold in this period. Skoda still has the biggest share of the Czech market, accounting for 11,595 of the new cars purchased, although the Czech firm's overall market share fell from 41.4% to 38.5% percent. Analysts attribute the rise in car sales to the Czech Republic's improving economic situation.
McDonalds enjoys record growth Czech revenues
Photo: archive of Radio Prague
Fast-food chain McDonalds has announced a record growth in revenues in the Czech Republic. Its year-on-year sales grew by 13.2% in 2006 to just over two and a half billion Czech crowns or one hundred and twenty million US dollars. Mac Donalds, which runs 72 outlets in the Czech Republic, did not open any new restaurants last year but still managed to attract seven and a half million more customers. Altogether, more than 44 million people visited a McDonalds outlet in the Czech Republic over the course of the year.
