In Business News this week: Ministers clash over aid to car parts plant; economic confidence reaches new heights; new committee to oversee nuclear power development; and EU rules could hold up dozens of road projects;
Czech Minister of Industry and Trade Jan Mládek and finance minister and ANO leader Andrej Babiš have clashed over a 225 million crown package of incentives for a car parts and components company to expand in the country. The Social Democrat industry minister said on Monday that the aid for the INA Lanškroun firm which would help create around 900 jobs but is being blocked by Babiš. The finance minister has rebutted the claim but accused Mládek of trying to gain extra cash not cleared in his 2016 spending. The aid is focused a package of 2.5 billion crowns in spending on a new plant in Svitavy, which has one of the highest jobless rates in Eastern Bohemia.
Confidence in the overall performance of the Czech economy has risen to its highest level since the peak of the last boom in June 2008, the Czech Statistical Office announced on Monday. The office’s composite confidence index advanced by 1.9 percent points in January compared with the previous month. The rise was largely due to more optimism among consumers but producers’ sentiment is also at its strongest level for the last five years, the office said.
The Czech government has cleared the creation of a new committee to coordinate the development of nuclear power in the country as well as the position of a nuclear “envoy” appointed as the main point person for developments in the sector on Monday. Minister for Industry and Trade Jan Mládek said in a press conference after the government meeting that the moves sent the “right signal” that the Czech Republic is committed to nuclear power and in particular to fulfill the Development Plan for Nuclear Energy adopted by the government in June last year. As well as piloting the construction of new nuclear reactors, the envoy and committee should also oversee national plans for a long-term storage site for nuclear waste; the national nuclear supply chain for the industry; international nuclear cooperation; and safeguarding Czech nuclear power know-how.
Czech medicinal cannabis producer Elkoplast Slušovice says it will deliver its first consignment of locally grown and produced product in the second half of February. Three similar consignments of 10 kilogrammes should follow by the end of this year. The Czech company signed a contract to supply cannabis to the state drugs authority last year. Use of medicinal cannabis is legal in the country since April 2013. Some local critics say medicinal cannabis is still difficult to find in pharmacies and the price is too high.
Dozens of road construction projects in the Czech Republic could be held up due to European Union regulations, Prime Minister Bohuslav Sobotka said after a meeting of economic ministers on Tuesday. Sixty-four construction projects are concerned; they have been in the process of acquiring authorization for so long – up to 15 years – that they are required by EU law to get fresh environmental impact assessments. Mr. Sobotka said this process could take years and could impact efforts to draw CZK 90 billion from EU funds.
The Czech competition office has started to probe the takeover by Brno City Council of the company behind most of the city’s international trade fairs, Veletrhy Brno. The city council last year bought a 61 percent stake in the fairs company from a Dusseldorf company for 224 million euros. The German company has been running the Brno fairs site and events for 17 years. Brno is particularly noted for its annual engineering and farm technology fairs.
The Czech Banking Association has revised slightly down its economic growth prediction for this year to 2.4 percent from November’s 2.5 percent. It has, however, upped its forecast for 2015 to 4.2 percent. The association sees growth in 2017 rising to 2.7 percent. Inflation, however, will only rise to something near the level of the central bank’s expectations in 2017 when it is expected to average around 2.2 percent.