Business News

In Business News this week: the EC raps the Czech Republic on the knuckles for breaking a promise to bring the public finance gap below 3.3 percent; the Czech central bank increased interest rates by a quarter of a percent; the number of ASDL internet connections doubles in one year; the Czech government takes the first step towards privatising Budejovicky Budvar, while European beer enthusiasts urge it not to; and Czech drinks maker Kofola increases its sales by 20 percent in one year.

Prague criticised for failing to keep pledge on public finance gap

Photo: European Commission

The European Commission rapped the Czech Republic on the knuckles this week for breaking a promise to bring the public finance gap below 3.3 percent of GDP this year. Estimates suggest the shortfall is actually around 4 percent of GDP. The commissioner for economic and monetary affairs, Joaquin Almunia, blamed the deficit on social spending approved before last year's elections. He said the Czech Republic should not have problems adopting the euro, if it can cope with an excessive public finance deficit. But Mr Almunia said it was too early to say whether Prague could meet its stated euro adoption target of 2012.

Interest rates up by a quarter but still lowest in Europe

The Czech central bank increased interest rates by a quarter of a percent on Thursday, in line with analysts' expectations. The benchmark two-week repo rate is now at 2.75 percent, the lowest in the European Union. The Czech National Bank last raised interest rates, also by a quarter of a percent, in September.

Taiwanese firm to employee 5,000 in Kutna Hora

The Taiwanese firm Foxconn said this week that it is planning to spend almost 150 million USD on a new LCD and computer components plant in Kutna Hora, central Bohemia. The factory should employ 5,000 people; Foxconn has the same number of workers at another factory in Pardubice.

Number of ASDL connections doubles in one year

The number of high-speed, broadband internet connections per hundred Czechs more than doubled to 4.91 in 2006, according to data from Britain's Point-Topic. That puts the Czech Republic ahead of Poland, with 4.75 connections, and Slovakia with 3.4. Meanwhile, the Czech group Internet pro vsechny (Internet for Everyone) said the growth in the number of ASDL connections had slowed down last year, as competition from wireless providers grew. It said there were 400,000 wireless connections in the Czech Republic.

Ministry takes first step to privatising Budejovicky Budvar

The Agriculture Ministry is about to take the first step towards the privatisation of Budejovicky Budvar brewery, when it declares a tender for an advisor for the sell-off, Mlada fronta Dnes said on Friday. Earlier this week the European Beer Consumers Union warned against the privatisation, which it said could affect the quality of Budvar beer. The EBCU are also afraid the brewer could get into the hands of Anheuser Busch of the United States - the maker of Budweiser is engaged in trademark lawsuits with Budvar in several countries. Budejovicky Budvar is the third biggest Czech brewery, and the only one remaining in state hands.

Kofola increases sales by 20 percent

The Ostrava-based soft drinks maker Kofola Holding saw a year-on-year increase in sales of over 20 percent in 2006, the company said this week. Kofola, a cola-like caffeinated soft drink, ranks third on the Czech market in sales terms. Kofola was created by the pharmaceutical firm Galena in the early 1960s, during research aimed at finding a possible use for the surplus caffeine produced in the process of coffee roasting.