In this week’s Business News: the Czech Republic finds itself in a recession; women are earning a quarter less then their Czech counterparts; bankruptcy declaration reach a four year high; computer sales are set to soar in 2012 and a new law is giving the government the muscle to tackle shady employment practices.
Unemployment rose by 0.1% in February, according to new data released by the Ministry of Labour and Social Affairs. In February, 541,685 were looking for work in the Czech Republic at an overall unemployment rate of 9.2%. The highest rates of unemployment were in Jeseník, at 17.9%, while Prague-east was the lowest, at 3.5%. Weak consumer demand continues to blight the Czech economy, while analysts fear that government austerity measures could increase unemployment levels to 9.5% .
The Czech government is debating continued austerity measures, hoping to save 23 billion crowns in 2012, 42.4 billion in 2013 and a whopping 84.4 billion in 2014. But the plans have been met with opposition from trade unions, who are highlighting that the cuts could lead to as many as 24,000 public sector job losses and include layoffs of as many as 17,000 teachers as well as 3,500 police officers within the next two years. Jaroslav Zavadil, head of the Czech-Moravian Confederation of Trade Unions recently called this “a path to hell, which will
Prime Minister Petr Nečas has said the public sector must brace for massive lay-offs in the next two years. Speaking at a press briefing held within the Civic Democratic Party’s ideological conference, Mr. Nečas admitted that the planned overhaul of the public sector could leave as many as 24 000 employees jobless –a figure floated by Czech trade unions who have protested the changes. Mr. Nečas said the Czech public sector was overstaffed and inefficient, with some institutions duplicating the work of others.
Education Minister Josef Dobeš on Friday rejected the idea of a mass lay-off of teachers as inconceivable and said he had received no such information from the Finance Ministry. According to figures released this week the austerity measures would leave the ministry 15 billion crowns poorer in the next two years. Finance minister Miroslav Kalousek responded to the statement by saying that the broken-down austerity package has been dispatched to every ministry with details of how much money each institution would have to save.
Trade unions have criticized the finance minister’s austerity plans for the coming years saying they would stifle economic growth. According to an analysis commissioned by the country’s umbrella trade union organization the proposed changes would bring a drop in investments, soaring prices and growing unemployment. Twenty-four thousand employees from the public sector would have to be laid off –of that 17,000 teachers and 3,500 police officers. Trade unions are proposing a more gradual lowering of the deficit in public spending, suggesting that the deficit be stabilized at around 120 billion crowns. The finance minister has proposed a much faster pace of scaling down the deficit which this year should not exceed 105 billion and is to be lowered by 42 billion crowns next year.
In this week’s Business News: the most absurd bank fee is announced; a study finds that a third of young Czechs are working flexible hours; fears that eurozone unemployment could hit Czech exports; the Finance Ministry is seeking to lure investment funds into the country and Czech Railway cutbacks mean fewer train conductors.
The number of people who have reached retirement age but continue working is on the rise in the Czech Republic. According to figures released by the Czech Statistical Office on Thursday, their number grew by 11,000 as compared to the previous year. About 157,000 Czechs are working despite the fact that they have reached retirement age. According to experts, the Czech labor market needs at least some older people to remain in the workforce due to the demographic of the country. One in twelve senior citizens over the age of 65 is still working, accounting for 1.5 percent of the labor force.
The Anticorruption Endowment has filed criminal charges against the Minister of Labour and Social Affairs, Jaromír Drábek, on suspicion of public orders made without tenders. The endowment’s chairman, Karel Janeček, says that suppliers for a number of new programmes at the ministry, such as payment information systems, were chosen without tenders and were companies close to the minister and his deputy, against whom they have also brought charges. The organisation adds that the new systems were created in spite of the fact that it would have been more economical to modify the old software. Unions have said the transfer to the new systems was moreover poorly prepared and that the computer system did not work.
Labour and Social Affairs Minister Jaromír Drábek went before the Social Affairs Committee of the lower house on Wednesday to explain last month’s serious fallout in dispensing well-fare payments. A new computer system introduced within a far-reaching social reform proved highly unreliable leaving many people in the lurch. Charities even handed out emergency food supplies to those who had no money for basic necessities. The minister came under fire from both coalition and opposition deputies who said the task had clearly been underestimated and ill-managed. Mr. Drabek argued that any new system had teething problems and assured the committee that all problem areas had been resolved. He said he would hand in his resignation should there be a repeat of last month’s problems.
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