Business News

Czech Republic gets low marks for pumping EU funds

The Czech Republic has been given a below average score for its success in pumping European Union funds according to an international study. The country was able to claim a quarter of the potential funds on offer between 2007 and 2009, a report by international consultants KPMG said. This is way below the success rate of the most adept country in the region, Estonia, which tapped 44 percent of the available funds. The Czech Republic also trailed another five countries in the region but was placed ahead of Bulgaria, Poland and Romania. The report highlighted the Czech failure to draw subsidies for research and development programmes but praised its ability to tap regional development funds. The country has until 2013 to improve its ability to take advantage of the almost 215 billion euros offered to 10 new EU members.

Low demand hits biggest national brewer

The Czech Republic’s biggest beer producer and exporter, Plzeňský Prazdroj, has announced a drop in overall sales and profit for the year ending in March. The brewer, which commands almost half of the domestic market, said sales fell by 2.5 percent and pre-tax profit by 1.0 percent to around 4.7 billion crowns, around 221 million US dollars. The company blamed a second successive year of lower beer consumption which it blamed on the economic crisis and the impact of higher sales and excise taxes.

Video conference boom beckons

Photo: Peter Björknäs, www.sxc.hu One business benefitting from the economic crisis is video conferencing. The market for such services, which allow companies to save on hotel and travel bills, is growing by around 25 percent a year in the Czech Republic according to businesses in the sector. Total turnover in the sector should this year total around 300 million crowns. According to research company Gartner, Czechs will this year spend around 50 million crowns on the software needed for such long distance link-ups. It says that that total could almost double in around three years.

Foreign expansion pays says ČEZ

Czech power giant ČEZ says that it has already recouped around half of its investment in foreign subsidiaries since it launched its out of Czech expansion five years ago. Cumulative operating profits from its 65 foreign companies based in 15 countries amount to around 31 billion crowns, or around 1.5 billion US dollars. That compares with a total investment bill of around 73 billion crowns. Last year ČEZ expanded in Germany, Albania, Romania and Turkey. The company says the growing presence abroad helps cushion it from the impact of the global recession.

Wage hikes curbed by gloomy times

Employees’ wages in the Czech Republic climbed by 2.2 percent in the first quarter of the year compared with the same period in 2009 with the average monthly wage amounting to 22,748 crowns. That is the lowest rise on record since figures have been kept under their current format from 2000. The real value of wage increases after taking away the impact of inflation was 1.5 percent. Figures from the Czech Statistical Office also show wages have actually fallen over the last year in some areas such as the transport, administrative and education sectors. But those working in the arts and entertainment sector enjoyed a surprising wage increase of around 7.0 percent in the first quarter of the year.