Business News

Business round-up: Finance Ministry envisages budget deficit of 48.5 billion crowns; PM outlines plan for rise in minimum wage; bus drivers threaten action over low wages; Rusnok named new central bank governor.

Finance Ministry envisages next year’s budget deficit at 48.5 billion

Photo: Barbora Kmentová

A Finance Ministry proposal for next year’s budget, which is to be debated by the government on Monday, sets next year’s deficit at 48.5 billion crowns, the Czech News Agency reported on Thursday. For 2018 the ministry envisages a deficit of 38.5 billion and for 2019 18.5 billion. The Finance Ministry is willing to increase the deficit in case of higher spending by ministries and other state authorities. Under the agreement between coalition parties, the deficit could reach up to 60 billion crowns next year and 50 billion crowns in 2018.

Sobotka outlines plan for rise in minimum wage

The Ministry of Labour and Social Affairs is to send a proposal to the government to increase the minimum wage in the Czech Republic from next year, Prime Minister Bohuslav Sobotka told a gathering of trade union leaders on Tuesday. The plan envisages a rise from the current figure of 9,900 crowns a month to 11,000 at the start of January. While the unions would like an increase of 1,500 crowns from the present level, employers say they regard a rise of 600 or 700 crowns as realistic.

Bus drivers warn of escalating action over minimum wages

Photo: Czech Television

Bus drivers have warned they will be starting an escalated series of industrial action over claims for minimum wages including extended strikes. Drivers on public service routes say they warned of action six months ago but negotiations since have not got anywhere. Many of the drivers, now on wages of around 70-80 crowns an hour, say the government should set a 100 crown an hour minimum wage. They say wages are being undermined by public tenders for operating bus routes in which the bus company making the lowest bid and often offering worst conditions to drivers often land the contract.

Jiří Rusnok appointed as next governor of Czech National Bank

Czech President Miloš Zeman this week appointed former caretaker prime minister and minister of finance Jiří Rusnok as the next governor of the Czech National Bank. Rusnok, already a member of the central bank board, will take over from Miroslav Singer whose mandate officially ends in June. Zeman highlighted the policy differences with Rusnok over the current low crown policy but pointed out that he had been appointed for his expert and practical public and professional experience. Zeman has called for an ending of the low crown policy as soon as possible while the central bank sees it continuing until at least mid-2017.

Rudolf Jelínek spirits producer posts record turnover

Photo: archive of Rudolf Jelínek

Czech spirits producer Rudolf Jelínek posted a record turnover last year amounting to nearly 470 million crowns. The company’s profit was 70 percent higher than in the previous year, the general director Pavel Dvořáček told the Czech News Agency on Thursday. The traditional plum liquor producer has finally recovered from the methanol scandal of 2012, during which 47 Czechs died of alcohol poisoning and which resulted in a decrease in demand for hard alcohol. In 2012, the company suffered losses to the tune of 19 million crowns.