Representatives of the Czech agriculture and food industry have warned against devastating effects a planned hike in VAT might have on the country’s farmers and food processors. The head of the Federation of the Food and Drink Industries, Miroslav Toman, told Czech TV on Sunday if the government goes ahead and raises the VAT rate to 19 percent, the industry might shrink by up to 20 percent as a result, while food prices will increase by some 25 percent, according to the head of the Czech Agrarian Chamber, Jan Veleba. The center-right government is considering raising the VAT to 19 percent to make up for falling tax revenues.
In today’s business news: The European Commission launches an antitrust investigation into the Czech energy giant ČEZ, self-employed individuals may be among those who profit from an overhaul of the Czech pension system, a new law eliminates advertising on two public TV channels, Czech tennis star Petra Kvitová’s marketing potential receives a significant boost due to her Wimbledon victory, the regional brewery Svijany posts record profits in 2010 and Czechs pay up to 20 percent more for mobile phone services than clients in neighboring
The Czech Republic’s Foreign trade ended in May with a surplus of 14.4 billion crowns, which is a year-on-year increase of 3.2 billion CZK, the Czech Statistical Office reports. Preliminary data shows an increase in cross-border exports in May of 18.2% and 17.5in imports. Foreign trade turnover grew by 17.8% year-on-year to 470.6 billion – 61.2 billion more than in May of 2008, prior to the global financial crisis.
The Liberec-based travel agency VIAVERA has announced that it will not be able to get out of debt and is filing for bankruptcy. VIAVERA is the fourth travel agency in the Czech Republic to go bankrupt this year, The company, which specializes in the destinations Greece and Turkey, will be filing for bankruptcy on Tuesday. Last week, Parkam Holidays had filed for bankruptcy, leaving many of its clients stranded at their holiday destinations.
In this week’s business news: Finance Minister Miroslav Kalousek has presented three different options for state budget cuts, the Labor Ministry has announced a tender for the new welfare payment cards, direct flights between Prague and Abu Dhabi will be launched in September, for the third time this year, a Czech travel agency files for bankruptcy, and a Czech daily writes that Vietnamese small business owners are often blackmailed into paying protection money.
The Czech Republic will not be contributing to a second bailout package for Greece. Confirmation of the news came after late-night talks at an EU leaders' summit in Brussels, at which it was agreed that the joint rescue effort would not involve any commitment from non-eurozone countries. The Czech Prime Minister Petr Nečas joined his British counterpart David Cameron in opposing a broad EU rescue effort via a European Financial Stability Mechanism which would have committed all 27 member states to provide loan guarantees. The Czech Republic has in the past taken on such guarantees for Ireland and Portugal but the authorities consider a similar service to Greece to be a much bigger risk.
Czech brewers have established a “beer fund” to fight rising imports of cheap, low-quality beers, the daily Hospodářské noviny reported on Monday. Members of the fund include Plzeňský Prazdroj, Heineken, Budvar as well as the Czech Beer and Malt Association. Under the motto “Czech beer - Our Beer”, the alliance plans to stage marketing campaigns to draw attention to the issue, and to support the EU’s protected geographical indication for Czech-produced beers. The head of the Czech Beer and Malt Association, František Šámal, said the project should ensure a long-term sustainability of Czech beer. Imports of foreign, mainly Polish beer, increased nearly three times last year, reaching just below one million hectolitres.
In today’s business news: Czech Railways has released an estimate of the damages that the strike caused the company, Prague’s taxi drivers and hotel owners benefit from the transport strike, the metallurgical company ArcelorMittal Ostrava sees profits of 758 million Czech crowns, the Finance Ministry has halted its administrative proceedings against the betting giant Sazka and the Manpower Employment Outlook Survey predicts an increase of employment opportunities by 3 percent in the next quarter.
The number of direct foreign investment projects in the Czech Republic increased last year by 16 percent, according to a survey by the consultancy firm Ernst & Young released on Thursday. In 2010, there were 71 such investments projects in the Czech Republic, placing the country 14th among other European nations. Ernst & Young’s Magdalena Souček said good infrastructure and qualified workforce continued to attract investors. The Czech government’s CzechInvest agency last year intermediated foreign investments of around 16.2 billion crowns, mainly in the country’s manufacturing and IT sectors.
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