Reuters says Czech ministries want free emissions vouchers for power producers; economy grew by 2.4% in the last quarter; the court approves the sale of Sazka by tender; woeful 2Q results for ČEZ; and the central bank says the country will have met the conditions for adopting the euro next year.
Reuters: Czech ministries want free emissions vouchers for power producers
Three Czech Ministries have allegedly made an as-yet informal decision to push for partly free emissions vouchers for energy producers between 2013 and 2020. The Reuters news agency reported the news, citing a source within the Czech government, whose current plan counts on charging all assignments of emissions vouchers. According to Reuters’ source, the Ministries of the Environment, Labour and Finance have agreed to take advantage of exemptions from European Union rules for the period, thus scrapping the current plan of selling all vouchers at auction. Czech energy producers would reportedly get 108 million vouchers during the period, which currently trade at around 16 euros.
Economy grew by 2.4% in 2Q 2011
The preliminary figures given by the Czech Statistical Office this week show that the Czech economy grew by 2.4 percent in the second quarter of 2011. Compared with the previous quarter, the statistic marks an increase in the gross domestic product of 0.2 percent. Exports, as usual, were the major force behind the growth, though analysts say this was hindered by a drop in consumption. The Czech economy is expected to grow at a slower pace for the rest of the year, like that of Germany and the rest of the Euro Zone; some analysts believe there might even be a drop in GDP growth in the third or fourth quarter of 2011. Employment, meanwhile, was up year-on-year by 0.7% for the quarter after adjusting for seasonal effects – hardly a change from the last quarter.
Court approves sale of Sazka by tender
The Municipal Court of Prague has approved the sale of lottery company Sazka at the behest of the bankruptcy trustee. A tender for the purchaser will be announced in the coming days, and the decision means that absolutely anyone can make a bid as long as they meet the basic conditions set by the trustee – namely a half-billion crown deposit. The likely competitors will be Sazka’s main creditors, Petr Kellner’s PPF and the multinational financing group KKCG. Some interested parties though, like the investment group Penta, have criticised the use of a tender, which they consider a dubious and non-transparent way of selling the company, and had been looking forward to a public auction. Lottery company Synot says it does not know if it will compete in the tender as it considers the conditions scandalous, aimed at allowing Sazka to be controlled by PPF and KKCG rather than maximising the price to satisfy all of the creditors.
Woeful 2Q results for ČEZ
Second-quarter results for the Czech power company ČEZ were even more disappointing than expected, showing a drop of nearly 40% year-on-year to 6.72 billion crowns, when they were leaked to the internet on Monday. Analysts had predicted a slump due to lower prices of electricity sold and unfavourable trends in the crown to euro rate, but rather something more in the vicinity of 11%. Profits were also brought down by new taxes on emissions vouchers and the solar energy plant tax. ČEZ was to publish its results on Tuesday before stock markets opened, however the Reuters news agency found them posted on a part of the company’s website. ČEZ put the leak down to poor internet security and said the problem had already been fixed.
Central bank prognosis puts country on track for euro adoption in 2016
The Czech National Bank released a prognosis this week according to which the Czech Republic will meet the most of the Maastricht conditions for adopting the euro next year. The bankers estimate that the government will manage to put the deficit for 2012 under three percent GDP with state indebtedness remaining relatively low, at 41.8% of GDP. Likewise conditions on interest rates and low inflation should be met by next year. Lastly the crown-euro exchange rate should fluctuate by no more than 15% for a two year period, all that allowing the euro to be put into use in the Czech Republic in 2016. Nonetheless, Prime Minister Petr Nečas will not be drawn on the ‘when question’. He said this week that setting a date for adopting the euro would not be good for the country. Moreover, he said, the current debt crisis in the Euro Zone is turning the euro into something it had not been when the Czech Republic joined the EU in 2004.