Business News


In Business News: the Czech crown reached a record high against the euro this week; the average gross monthly wage grew to almost 19,000 crowns in the third quarter; the anti-monopoly office has imposed a fine of over 8 million dollars on Cesky Telecom for abusing its market dominance; and the prices of gas, electricity and heating are set to rise from the start of next year.

Czech crown reaches strongest ever level against euro

Finance Minister Bohuslav Sobotka
The Czech currency has reached its strongest level in history against the common European currency, trading at 28.84 crowns to the euro on Friday morning. The crown got a temporary boost from neighbouring Slovakia's move to join the ERM 2 mechanism pegging it to a narrow band against the euro.

It also strengthened due to a new, higher rating on the outlook for the Czech economy from the agency Standard & Poor's. Analysts polled by the CTK news agency said they believed the crown was overvalued by about 2 percent.

Average gross monthly wage up to almost 19,000 crowns

The average gross monthly wage in the Czech Republic grew by just under 1100 crowns year-on-year to reach 18,833 crowns in the third quarter of 2005, or roughly 770 US dollars per month. The Czech Statistical Office said that figure represented a nominal increase of 6.2 percent and a real increase of 4.2 percent.

Wages grew fastest in the public sector. Employees in the financial sector, including banks, insurance companies and brokerage firms, received the highest average wage of nearly 1400 US dollars per month, almost three times more than the lowest wage of 550 US dollars, for those working in hotels and restaurants.

Meanwhile, some companies are rebuffing union demands for wage increases, arguing that their tax home pay will increase due to changes to planned tax breaks that go into effect next year.

Anti-monopoly office fines Cesky Telecom for abusing dominant position

The Czech Republic's anti-monopoly office has levied an 8.3 million US dollar fine on the country's dominant fixed-line operator, Cesky Telecom. The anti-monopoly office said in a statement that since 2002, Cesky Telecom had linked prepaid minutes and fixed monthly charges, and therefore had abused its dominant position on the local telecommunications market.

The head of the office, Martin Pecina, said in some cases Cesky Telecom had made it impossible for customers to order one service without signing on to antoher. Rival operators have repeatedly complained about the company's pricing policy. The Swedish operator Tele2 filed a lawsuit this February accusing Cesky Telecom of breaching both Czech and European Union competition regulations.

EC inquiry into proposed Tesco acquisition of Carrefour's Czech, Slovak units extended

The European Commission has extended until December 23 its inquiry into the British retail chain Tesco's proposed acquisition of its French competitor Carrefour's Czech and Slovak units. The Commission did not reveal why the deadline had been extended.

The AFP news agency notes that the EU executive branch extends competition inquiries if the companies involved submit remedies to allay competition concerns, or if a national competition authority asks it to rule on a deal.

Gas, electricity, heating set to rise in price from January

Photo: archive of Radio Prague
Czech households face price rises from the new year, with gas, electricity and heating all set to go up. While the price of gas is set to increase by an average of 4.8 percent from January, electricity will rise by 8.9 percent and heating by 11 percent, in some parts of the country.

Meanwhile, the start of January will also see the arrival of competition in the electricity sector, with customers able to choose their supplier for the first time.

Senate vote paves way for forced purchase of land for new Prague Airport runway

The forced purchase of land for the construction of a new runway at Prague's Ruzyne airport has been given the green light, after the Senate surprised many by not rejecting an expropriation bill this week. Airport authorities say the airport will need the new runway from 2009 or 2010 at the latest due to a growth in traffic.