Business News

Coming up in this week's business news, the lower house approves the budget but the Finance Minister votes with his feet; Czech exporters issue a cry for help as the crown continues to soar; parliament postpones the introduction of a new law on sick pay; the Transport Ministry reaches agreement with Austrian company Kapsch over the new motorway toll system; Czech building societies report a substantial rise in loans and Nigeria considers buying around a dozen L-159 subsonic fighters from the Czech Republic.

Chamber of Deputies passes 2007 budget - but Tlusty abstains

Vlastimil Tlusty and Bohuslav Sobotka (behind), photo: CTK

Czech politicians may be incapable of forming a stable majority government, but that didn't stop them from passing the 2007 budget this week. The budget won the backing of 149 of the 184 deputies present in the lower house, although it was boycotted by the man who created it - Civic Democrat Finance Minister Vlastimil Tlusty. He abstained from voting in protest at a last-minute increase in the deficit pushed through by left-wing deputies.

Czech exporters appeal for help as crown breaks new record

The Czech Exporters' Association issued a cry for help this week as the Czech currency, the crown, soared to new record highs. The Association warned that all exporters in the Czech Republic were suffering from a strengthening crown, leading to greater losses and raising the spectre of higher unemployment. The head of the body called on the Trade and Industry Ministry to curb energy prices for a start to offset the losses. The crown reached 27.70 to the euro on Thursday - a new record.

Lower house postpones new sick pay system until 2008

The lower house postponed until 2008 the introduction of a new law on sickness benefits, meaning that the state will continue to cover sick pay for the first two weeks of illness. Under the new law, which was to come into effect on January 1st, the bill will be picked up by employers rather than the state. The changes will see companies' health insurance contributions fall from 3.3 percent to 2.3 percent and the state will reimburse firms half of the money they paid out in sickness benefits.

Transport Ministry, Kapsch reach deal over motorway tolls

Photo: CTK

The Czech govenrment and the Austrian firm Kapsch, which has built a toll system on the Czech Republic's motorways and major roads, finally reached a deal in a dispute which had threatened to delay the system's launch. The two sides agreed on a fine to be paid by Kapsch for delays. The system will now be launched as planned on January 1st. At present it is being introduced for lorries, but could be expanded to all vehicles in the future.

Czech building societies report rise in number of loans

Czech building societies reported a substantial rise in the number of loans in 2006. Building societies signed almost 711,000 new contracts on home-building savings, a 20 percent rise year on year. The number of new contracts traditionally grows at the end of the year due to state support to clients for every year of savings. Building societies have so far lent more than 48 billion crowns this year.

Nigeria to buy L-159 subsonic fighters from Czech air force

Nigeria is considering buying around a dozen Czech-made L-159 subsonic fighters to revitalise its aging air force, the Prague Post reported this week. The deal is yet to be finalised, but Defence Ministry officials said Nigeria was definitely interested in buying more than ten of the aircraft. President Vaclav Klaus reportedly discussed the deal this week with his Nigerian counterpart Olusegun Obasanjo.