Business News
Czechs demand transition period for tax hikes
The Czech Republic has said it will demand transition periods concerning increases in some tax rates after the country joins the European Union. Czech Finance Minister Jiri Rusnok said his country wanted to maintain lower VAT and consumer tax rates than those of current EU members, and would raise taxes gradually in order to avoid any negative social and economic consequences. After meeting the EU´s enlargement commissioner, Guenter Verheugen, in Brussels earlier this week, Mr. Rusnok said EU officials understood the Czech Republic's position. He also said that the Czech economic performance was improving, something which should be reflected in the EU´s annual progress report due to be released in autumn.
Govt allocates funds for economic big bang
The Czech government has allocated 166 billion Czech crowns or more than 4 billion USD in a project to boost Czech economic growth, as proposed by Trade and Industry Minister Miroslav Gregr. The money will be invested in various economic fields and is hoped to accelerate GDP growth to 4 percent this year and up to 6 percent in 2002. The main areas of investment will include housing construction, transport infrastructure, industrial zones and restructuring of the coal-mining and metallurgy sectors.
However, opposition politicians as well as some economic experts are rather sceptical about the success of the plan. Analyst Radomir Jac from Commerzbank is one of them:
Japan's Onamba to build new factory in Olomouc
Japanese company Onamba has started the construction of a new production facility in an industrial zone near the town of Olomouc, Northern Moravia. The factory will produce cables and inductors for the electrical engineering industry. Onamba will invest 100 million CZK or 2.5 million USD and will create 150 jobs on the site and another 150 jobs for people working from home. Onmaba selected Olomouc as it offered the best equipped industrial zone at the most favourable price.
Unemployment rate stagnates
The registered unemployment rate in the Czech Republic stood at 8.1 percent which means no change from May. Unemployment decreased over the previous six months. According to experts, there is a greater number of new jobs and the labour market has absorbed school-leavers and graduates more easily.
Agriculture needs CZK 80 billion to prepare for EU
The cost of preparing the Czech agricultural sector for EU integration has been estimated at 80 billion Czech crowns. Approximately half of that sum should be injected into the sector and related institutions, and half would be paid for by consumers, since it represents the current price gap between Czech and EU markets. The president of the Czech Agrarian Chamber, Vaclav Hlavacek, has criticized the government for failing to finance preparations adequately and for so far having failed to set up an agency which would distribute EU funds. He said that it was essential that the state should negotiate more favourable conditions for Czech goods on foreign markets and to create the necessary legal conditions for establishing a marketing fund to support Czech exporters.
Construction output remains high
Construction retained its position as the fastest growing industrial sector in the Czech Republic in May. While in the previous months, the main construction works included transport infrastructure, in May it was production halls, a result of a great volume of foreign investment. Construction output in May grew by 15.2 percent, slightly less than in April. The rise in output has also been accompanied by an increase of labour productivity in the construction sector. The positive trend is expected to continue for the whole of this year.
Prague's subway system covered by mobile phone signal
The three Czech mobile phone operators, Eurotel, Paegas and Oskar, have completed a joint project to allow all subway passengers in the Czech capital Prague to receive a mobile signal whilst underground. The coverage is in the 900 MHz band and the operators are considering another joint project to extend the signal to the tunnels as well.
Study: serious defects in administration of Czech commercial law
Czech commercial law and its administration has often been criticized for serious drawbacks that make life difficult for creditors and enable debtors to avoid paying their debts for long periods.
Recently, British Mr. Justice Colman analysed the organization of the administration of commercial law in the Czech Republic. The defects he found include excessive delays in court hearings, unavailability of pre-trial orders freezing defendant's assets, and corruption in the Commercial Registry, to mention just a few. Reforms that have recently been introduced with the aim to make the justice system more efficient, according to Justice Colman, do not go anything like far enough.
RP's Daniela Lazarova spoke to Mr. Justice Colman about his mission.
