Business News

In Business News: the Czech National Bank raises interest rates by a quarter of a percent to 2.25; more than a a quarter of firms in the Czech Republic bribe officials to secure public orders, says the World Bank; police seize almost 19 million USD from the accounts of three suspected of stealing from the Czech Consolidation Agency; and the national grid is to be improved after the worst blackout since the 1970s; and a Czech bank introduces video bankers.

Benchmark interest rate up slightly to 2.25

The Czech National Bank raised the benchmark interest rate by a quarter of a percentage point to 2.25 on Thursday, in order to prevent growth in inflation. The risk of inflation had increased due to rising consumer spending and high energy costs, board member Michaela Erbenova said prior to the hike. Czech interest rates rank among the lowest in the EU.

Corruption in public orders rising here, falling around region, says World Bank

More than a quarter of firms in the Czech Republic bribe officials when they want to secure public orders, according to a World Bank report released on Thursday. Among former Communist states this kind of bribery is more common only in Lithuania and Albania. While bribery is on the decline in countries such as Romania and Ukraine, the report says it is actually increasing in the Czech Republic. A new Czech law on public procurement, which came into force just this month, is intended to reduce corruption in the awarding of public orders. However, some critics say it is too complicated and will not increase transparency.

Radka Kafkova, photo: CTK

Police seize large sums as consolidation agency investigation continues

A specific case of alleged corruption has been making the headlines this week: police have seized 420 million CZK (almost 19 m USD) in the accounts of three people accused in a bribery case at state bail-out agency the Czech Consolidation Agency. Board member Radka Kafkova has been arrested, along with former employee Josef Tykva and businessman Pavel Hrach.

Operator pledges to speed up modernisation of national grid after collapse

After the country's biggest electricity blackout in three decades on Tuesday, the company which operates the Czech national grid, CEPS, said it would speed up modernisation and reinforcement of the network. The collapse was evidently due to a surge caused by unusually high demand in southern Europe. Initial estimates suggested damages caused to Czech companies were in the tens of millions of crowns.

CEZ turns east as demand grows

Meanwhile, Czech power giant CEZ is to shift a major part of its exports to Slovakia and Hungary and away from western Europe, where it had previously focused its efforts. The inflow of foreign investment and positive economic developments are leading to increased demand in former communist states. Furthermore, several power facilities in these countries will have to be shut down by 2020 for environmental reasons.

Video bankers aimed at customers in small branches

One of the country's biggest banks CSOB is from August 1 to offer a service new to Czech customers: video bankers. The idea is to allow customers at smaller banks to discuss particular questions with specialists, a spokesman told Hospodarske noviny. If a trial at three branches works out CSOB will introduce the system elsewhere.