In this week’s Business News: Czechs discuss eurozone support; Škoda Auto comes under Brussels state aid scrutiny; windfall gains keep Czech Airlines in profit; Czechs’ purchasing power takes a hit; and Čepro fuels merger talks.
Government discusses eurozone rescue support: report
Photo: European Commission
The Czech Republic is currently outside the eurozone and has been largely insulated from the turbulence surrounding the future of the European single currency and support measures for its most exposed members. But reports are surfacing that the Czech Republic could be drawn into moves to bolster support for the eurozone as worries spread from Greece and Ireland to other countries. The daily Dnes says the government is secretly discussing whether the country could take part in a new rescue plan for eurozone countries. It said its information is based on a government report with talks confirmed by two ministers. The paper says that Czech eurosceptic president Václav Klaus has taken the stance that the Czech Republic should seek an opt out from adopting the euro. The country is obliged to join the zone when it fulfills all the criteria but no date has been set for that to happen by the government.
Strict aid rules snare Škoda Auto
The Czech Republic’s biggest car maker and biggest exporter, Škoda Auto, has come under the scrutiny of European competition watchdogs in Brussels over suspected state support. News of the scrutiny was released by the deputy head of the Czech competition office. Checks are centred on state incentives for increased production of motors and gear boxes. Volkswagen-owned Škoda confirmed the probe but was unwilling to say what sums are at stake. European aid rules for the car sector are extremely tight due to over capacity in the sector.
Czech Airlines: on a windfall profit and a prayer
Czech Airlines grabbed the spotlight this week after the government threw it into a holding company created from the carrier and the company running Prague airport. The move gives the airline a stronger financial foundation amid reports that results are still lagging management expectations. The daily Dnes says the airline made a 125 million crown profit in the first nine months of the year but only thanks to a massive property sell off bringing in around 1.5 billion crowns. That means the carrier was still making a heavy operational loss.
Purchasing power dwindles as jobs market tightens
Photo: Barbora Kmentová
Czechs’ real purchasing power in 2009 fell to 70 percent of its level of a year earlier according to a survey of the impact of the recession released this week by the national statistical office. The biggest cause of tighter household budgets was unemployment with almost one person in 10 losing their jobs in companies employing more than 10 over the year. The national number crunchers found that the lucky ones who found jobs last year were brought in at lower wages than those going out of the door. Wage savings there averaged around 5.0 percent.
State fuel firm seeks clearance to court refinery companies
State fuel oil, processing, storage, distribution and petrol station operator Čepro is seeking the go ahead to launch talks about its integration with a major refinery company. Čepro says feelers put out about the idea have been welcomed by three companies and it will seek the go ahead from its board to take talks further in the middle of December. The government will also have to okay any merger or share swop. One strategic question for the government will be whether some of the responsibility for storing strategic fuel oils such as petrol and aircraft fuel can be put in private hands. Czech refining company, Česká Rafinérská, is probably the front runner for a tie up with Čepro.
