Business News

Government turns down Euro Pact

Photo: European Commission The Czech Republic, along with three other countries, has refused to join the planned “Pact for the Euro”. Prime Minister Petr Nečas said Thursday that part of the reason was the “take-it-or-leave-it” style in which the pact was presented, with the government having received no invitation to discuss its final form. Additionally, Mr Nečas fears that the pact would open the door to tax harmonization which could be damaging for the bloc as a whole. It was opposed by his cabinet unanimously. The government nonetheless agrees with a number of the provisions of the pact, which would monitor the sustainability of member states’ pension systems and labour costs, among other things. For now, says the PM, they will see how well it works and the Czech Republic could join later after more political debate. Great Britain, Hungary and Sweden have also turned down the pact.

Central bank keeps record low interest rate

The council of the Czech National Bank has voted 5 to 1 to keep interest rates at their present level. The decision means that the base interest rate, from which commercial rates are derived, will stay the record minimum of 0.75%, where it has been for almost a year now. Analysts were for the most part expecting the move, anticipating a gradual increase in rates from the middle of the year. The reason for the easy pace, in spite of a close decision on a rate hike last month, was primarily the fact that inflation for the first quarter was less than the central bank expected. The Czech crown weakened slightly against the Euro in response to the vote, falling 13 hellers to 24.56 to the Euro.

Pricey coal a boon to RWE Transgas

A shortage of cheap brown coal has heating and steam plants turning to natural gas. The country’s main gas provider, RWE, is set to profit handsomely as heat providers grow tired of waiting to see whether the government will eventually change mining limits. RWE says that companies, towns even housing associations interested in switching to gas are turning to it by the dozens. While heat produced from natural gas is currently about a third more expensive than from brown coal the only company with available coal stores, Czech Coal, plans a major price hike, while the price of gas is being pushed down by international competition.

Seznam.cz buys up video website Stream

The biggest player in Czech cyberspace, Seznam.cz, is now the full owner of the video website Stream.cz. Seznam bought the remaining 50% of shares that it didn’t own already for an unknown price from music mogul Miloš Petana, who owns the recording company Supraphone and distributor Bontonland. Seznam says the purchase will help it integrate video services and further develop the format for advertising. Stream had nearly 3 million visitors and 71 million hits in January, making it the fifth most popular Czech website after only four years in business. The new owners say that regular users will see no change in content due to the purchase.

First company blacklisted for fraud in public tender

The Ostrava construction firm Stavoenergo has become the first company to be blacklisted by the Czech antitrust bureau, meaning it will not be able to compete in tenders for public works for three years. The Office for the Protection of Competition found that the company had forged documents for a 225-million commission in northern Moravia, and fined the firm 500,000 crowns. Stavoenergo it seems will not live to see the end of the ban; a court in Ostrava has declared the company bankrupt and roughly 16 million crowns in debt.