Unemployment continues growing

The Czech unemployment rate has been growing for three months and reached 9.4 percent in August. In July, unemployment stood at 9.2 percent. Analysts say the situation has worsened due to inflow of fresh school graduates to the labour market. However, Petr Zahradnik says this is not the only reason:

"For the August development itself, maybe this was the prevailing reason, but for the whole summer period, I think we have seen the impact of first, a very slow demand in the EU, and second, the impact of exchange rate appreciation. These two factors very much influenced short term or medium term business strategies, especially for exporters, and especially for exporters from the group of small and medium-sized companies. So, the seasonal factor of new school graduates plus these factors, connected with exchange rate appreciation and very weak economic performance in Europe contributed to the growth of unemployment rate."

The Social Democrats who were the ruling party in the previous term and now are the dominant partner in the ruling coalition, pledged to fight unemployment but it seems they have not been very successful - the unemployment is getting close to its record high from the beginning of the year 2000 now. What can the government do, what instruments does it have to tackle the problem?

"The main problem of unemployment right now in the Czech Republic is the so-called structural unemployment, and to solve the problem of structural unemployment, of course, takes time. It is almost impossible to solve the cause of this problem in one year, it is rather a task for several government terms. I think right now, the government should accelerate its so-called active employment policy, and also for example at this point to motivate people, including non-qualified people, to participate in the after-floods restructuring and recovery of the economy in the affected areas. I mean in this period, this effective motivation would help decrease the unemployment."