Business News

The Czech government has delayed the planned sale of national power producer CEZ until after it has drafted a new national energy policy. The Czech Senate has approved a new law aimed at curbing tobacco promotion. The European Central Bank has urged EU membership applicants to get their economies in shape before joining eurozone. The Czech cabinet has scrapped a contract awarded to a private company to build and operate a highway in North Moravia.

Business News

New energy policy being drafted, sale of power utility CEZ to be postponed

The Czech government has delayed the planned sale of national power producer CEZ until after its current four-year term expires in 2006, at least two years later than previously expected. According to Industry and Trade Minister Milan Urban, who was appointed in March, the government has been working on a national energy policy and would decide on the future of CEZ and other strategic energy-related companies, such as coal mines, only after the policy is finalised. The government failed to sell CEZ and stakes in regional power distribution companies in 2002 as none of the bidders was willing to pay the 200 billion crowns the government demanded.

Senate approves anti-tobacco law

The Czech Senate approved a new law aimed at curbing tobacco promotion. The law will bring Czech regulations on tobacco closer to those in the European Union, which the Czechs are set to join in May 2004. The EU has cracked down on smokers within its own borders through tough labelling laws and a ban on tobacco advertising. The new Czech law will ban tobacco advertising in public places as well as sponsoring of cultural and sport events except for motor racing, from July 1, 2004.

European Central Bank urges applicants to get their economies in shape before joining eurozone

European Central Bank Vice-President Lucas Papademos told top central bankers from 12 EU accession countries on Tuesday candidates should get their economies in shape before entering the eurozone in order to avoid troubles during the waiting period. Under the ERM-2 exchange rate mechanism, candidates must keep their currencies in a plus/minus 15-percent band for at least two years ahead of euro adoption. Some of the candidates such as the Czech Republic have criticised the requirement, saying it forces exchange rate targeting, blurring their policy of targeting inflation. Other criteria for adopting the euro set maximum levels of inflation, interest rates, public debt and budget gaps. The ERM-2 rule means candidates are expected to join the euro in 2007 or later.

Government terminates highway construction contract

Milan Simonovsky, photo: CTK

The Czech cabinet on Monday scrapped a four billion euro contract awarded to Israeli company Housing and Construction to build and operate an 80-kilometre highway in North Moravia, choosing instead to finance the project on its own. The original contract was awarded without a public tender by the previous government before last June's general election, but a lack of guarantees on the side of the supplier and no ceiling on the already excessive cost made the new government re-consider the project. Transport Minister Milan Simonovsky said the government will ask parliament to approve an extra-budgetary financing package to build the road which is seen as crucial for the development of the remote region with one of the country's highest unemployment rates of around 20 percent. The European Investment Bank also said it was ready to participate in financing between 50 and 75 percent of the total cost.