Business briefs

Cabinet fails to agree on 2005 budget, FinMin seeks advice on trimming public work force, EU okays CSOB's state guarantees but not to GE Capital, and crown nears all-time high against the U.S. dollar.

Business briefs

Cabinet fails to agree on 2005 budget

The Czech cabinet on Wednesday failed to reach agreement on the state budget for next year, with individual ministries each holding out for more funding than the government was willing to disburse. The Agriculture Minister is seeking more subsidies for farmers, the Labour Minister wants additional funds for social benefits and higher pension indexing, and other ministers are looking to rollback planned austerity measures.

FinMin seeks advice on trimming public work force

Meanwhile, the Finance Ministry will hold a tender to choose a consulting firm to advise the ministry on how best to save money through trimming the public sector work force, the daily Mlada fronta Dnes reports. Similar human resources audits have been undertaken at city halls in Prerov, Trebic and Prostejov. The Finance Ministry is encouraging other ministries to follow suit.

EU okays CSOB's state guarantees but not to GE Capital

The European Commission has approved state guarantees granted to the Czech bank CSOB as having been in line with EU competition rules. According to the Commission, state aid agreed to in the pre-accession period is acceptable if the conditions of the aid were precisely defined. The ruling means that CSOB will not have to return tens of billions of crowns it received in state guarantees in the year 2000, when it took control of the failed IPB bank. However, the Commission has begun formal proceedings against state aid granted to GE Capital when it took over the failed Czech bank Agrobanka.

Crown nears all-time high against U.S. dollar

The Czech crown came close to reaching an all-time high against the U.S. dollar on Wednesday, with the currency trading at 25.38 crowns to the dollar. The crown was firming to the dollar on developments in the euro/dollar market, as the U.S. currency was losing to the euro. According to analysts, by next month the crown could even strengthen beyond 25 crowns to the dollar.