Business news: the Czech economy is in record-long recession, the government pledges to help farmers, ČEZ launches arbitration proceedings against Albania and Freedom Tax Day will come two days later this year.
Czech economy in record long-recession
The Czech economy is in record-long recession, having contracted for the sixth quarter in a row, according to figures posted by the Czech Statistical Office on Wednesday. The economy shrank by 0.8 percent in the first quarter due to a fall in foreign demand affecting mainly the car sector. Lower investment activity also led to a further drop in construction. According to the Czech Statistical Office the year on year decline has deepened to 1.9 percent. The crown slumped to its weakest level since November 2011 on the news.
Government to support farmers
The government will extend greater support to Czech farmers, for instance in setting up sales cooperatives and marketing of primary products, Prime Minister Petr Nečas said at this week’s Agricultural Forum in Prague. The Czech agricultural sector is going through hard times and farmers have been severely-hit by cheap food imports from other EU states. The prime minister said the government was working on a pro-growth strategy for the sector aiming primarily to address the existing structural imbalance: growing exports of agricultural primary products and growing imports of end products.
ČEZ launches arbitration proceedings against Albania
The state run power giant ČEZ said on Thursday it had launched arbitration proceedings against Albania to seek damages after the Balkan state revoked its license to operate the national grid in January of this year. ČEZ said in a statement that Albania had failed to protect its 102 million euro investment in the electricity distributor Shperndarje. ČEZ did not disclose the amount of damages sought but the Czech media have put it at 190 million euro. Although ČEZ officially launched arbitration proceedings this week its spokesman said it was not ruling out the possibility of an out- of-court settlement. According to recent figures ČEZ’s quarterly profit jumped by 24 percent after it exited the unprofitable Albanian operation and traded carbon permits.
Czech Republic not to restrict Croat worker’s access to its labour market
The Czech Republic will not restrict Croat workers’ access to the Czech labour market after Croatia’s entry to the EU in July. Prime Minister Petr Nečas announced the decision after Wednesday’s cabinet meeting, saying that the Czech Republic wanted to observe the policy of four freedoms, including that on the free movement of people. He said the development on labour markets since the Czech Republic’s own accession in 2004 had shown that the restrictions imposed on Czech citizens were unnecessary and Prague had no intention of inflicting this upon other newcomers.
Tax Freedom Day later than last year
Czechs will celebrate this year’s Tax Freedom Day on June 11th, two days later that last year, according to the calculations of the Liberal Institute. Czechs will thus work 161 days for the state. According to the institute the negative shift is caused by higher public spending. According to Patria Finance which uses a different method of calculation, Tax Freedom Day will arrive on June 21st, while last year it was June 19th. Tax Freedom Day is the day when the nation as a whole has earned enough money to pay off its total tax bill for the year.