Business News

Czech Republic got 31 billion more than it gave from the EU in 2011

The Czech Republic received almost 31 billion crowns more from the European Union's budget than it contributed in 2011, the Finance Ministry has reported. The difference was roughly 17 billion lower than in 2010 due to a revision of national accounts and a suspension of payments caused by problems with some operational programmes. Finance Minister Miroslav Kalousek said that despite those problems, the Czech Republic remains a significant net recipient of money from the EU, having secured a total 176 billion between 2004 and 2011. The biggest part of EU subsidies came from the Cohesion Fund and Structural Funds from which the Czech state received 43.5 billion last year. Revenues from the common agricultural policy reached 26.5 billion in 2011.

15.6 billion may have to be returned to the EU due to errors in subsidies use

On the other hand, the Czech Republic is in danger of having to return 15.6 billion to the EU due to errors in the use of European subsidies for transport projects, according to results of a European Accounting Court audit. Previously the government has estimated that no more than 11 billion would have to be returned. The project in question is an unfinished part of the D8 motorway leading from Prague to the German border. The accounting court cites dubious tenders, non-transparent increases of excess work hours and delays in the completion of the subsidised projects. The accounting court also labelled the repair of a railway bridge in Kolin for 1.2 billion as problematic. The Transport Ministry wants to shift the subsidies from problematic to problem-free projects. However, the Czech Republic has to spend the money by 2015.

Petrol prices continue to reach new records

Prices at Czech filling stations have continued to reach new, record levels over the past week. The top-selling Natural 95 rose by 60 hellers on average to 36.25 crowns a litre while the price of diesel went up by 69 hellers to 36.91 per litre, according to data from the company CCS. The increases have been caused by a poor crown-to-dollar rate, and high oil prices which may increase even more depending on the EU´s decision on an oil embargo against Iran. The association of petrol stations has proposed a cut in excise duties on diesel oil; however this was opposed by the finance minister, who believes it would be counterproductive and run against international agreements.

Banks plan to open dozens of new branches

Despite the age of internet banking, banks in the Czech Republic plan to open dozens of new branches this year, according to a poll carried out by the Czech Press Agency. The largest expansion is being planned by UniCredit Bank, which wants to add over 50 branches to the 23 it opened last year. Česká spořitelna, the largest bank in terms of client numbers, wants to open 14 new outlets and Poštovní spořitelna, which belongs to the ČSOB group plans to open 13. In contrast, Komerční banka and Raiffeisenbank, among others, said they had completed the main expansion of their branch networks last year, when Raiffeisenbank, for one, saw its largest-ever expansion. By the end of 2011 there were more than 2,000 bank branches in the Czech Republic.

Social Democrats propose bills to decrease household indebtedness

The opposition Social Democratic Party proposed six bills this week aimed at decreasing the indebtedness of Czech households. The series of bills looks to limit contractual fines, introduce an obligation to ask a debtor to pay before filing a lawsuit, and integrate multiple orders for property seizures. The party says that Czech households owe more than a billion crowns and often end up in debt traps, one of the reasons for which they believe are the harsh conditions of debt collection. The government says it is willing to discuss the legislation and is already considering some of the measures on its own. The STEM agency reported this week that exactly one-third of Czech households currently find themselves in difficult financial situations, which is in fact an improvement year-on-year. Slightly less than one half of respondents said they felt they were well off financially.