The European Commission has criticized the Czech Republic for failing to pass a new law on civil servants and said that the country may lose most of the financing it receives from the EU structural funds starting next year. EU officials are concerned that civil servants, especially at Czech ministries, change together with the political leadership, which thwarts continuity and efficiency of policy implementation. The Czech Republic is the only EU country that has yet to pass a law that would prevent high fluctuation in the civil service. If the Czech Republic does not pass the bill by the end of the year, it could lose up to 500 billion crowns in European funding.
Some institutions in the public sector reportedly hike their employee figures in order to get more money for wages. The daily Pravo broke the news on Monday saying that while government austerity measures had frozen salaries in most public sector institutions Prague Castle employees got regular salary hikes. This was possible due to the fact that the Office of the President artificially raised the number of employees to 114 while in reality it was employing merely 87. Finance Minister Miroslav Kalousek told Czech Television that this tactic, employed by some firms, was unethical but not strictly illegal since it was hard to prove that the additional posts would not be filled shortly.
Union leaders and representatives of the Czech Republic’s spas have demanded an immediate halt to changes in the system of spa treatment. They say the very existence of the country’s spas has been threatened by a shortening of the average length of stays and a marked reduction in payment for treatment by health insurers. Doctors have reportedly become afraid to prescribe spa care even in cases where they are still able to do so. The unions and spa owners have called for a meeting with the minister of health to address the problem.
Czech annual inflation remains unchanged at 1.7 percent, which is in line with market expectations and slightly below the forecast of the Czech National Bank (1.8 percent). Consumer prices rose by 0.1 on the month in April, driven by the higher prices of clothing, footwear, alcohol and tobacco products. On the other hand, the price of foodstuffs, primarily pastry and dairy products, decreased slightly. Separate data released by the Czech Labour Ministry on Friday showed the April jobless rate at 7.7 percent down from 8.0 percent.
In this week’s Business News: The grey economy in the Czech Republic is estimated to be 16% of the GDP; Average fuel prices have gone done for the fifth week in a row; The Czech energy company Enrgo-Pro has been fined by the Bulgarian anti-monopoly agency; Unemployment sees a small decline to 7.7% in April, due to more seasonal positions; A group of international solar energy investors have filed an arbitration suit against the Czech Republic; Czech and Poles want to oppose planned EU legislation curbing cigarette sales.
Former labour and social affairs minister Jaromír Drábek (TOP 09) said on the Sunday television talk show Partie on Prima Family channel that those who want to discontinue the current S-Card social benefits payment scheme should pay for the loses this will cost the state. Mr Drábek, who introduced the new system last year, said it will save the state up to three billion crowns in the next 12 years, which is the duration of the current contract between the ministry and the Česká spořitelna bank that is administering distribution of welfare payments through the S-Card. Prime Minister Petr Nečas called on the current Labour Minister Ludmilla Mullerová (TOP 09) to terminate the highly criticized scheme last week, and the cabinet rejected a proposal to maintain the S-Card system on Thursday.
A new survey released by the STEM polling agency suggests that Czechs, in troubled economic times, largely blame foreigners for the loss of jobs. According to the poll, two-thirds stated there were ‘too many foreigners in the country’ (there are an estimated 438,000) while 45 percent said they were against foreigners being hired. Are jobs actually at threat or is the sentiment xenophobia plain and simple?
This week in Business News: The construction sector in the Czech Republic is expected to restart growth in 2014; Škoda Yeti was voted the most popular car by British car owners; ČEZ has asked two remaining contenders in the Temelín expansion deal to submit better offers; Economic confidence is down in April, after two straight months of improvement; The Federation of Food and Drink Industries wants to introduce stricter rules on product labeling; Trade unions and employers reach no agreement on minimum wage increase.
Trade unions and employers on Thursday failed to agree on a planned minimum wage increase in 2014, leaving the decision in the hands of the government. While trade unions demanded a 600 crown raise, employers would not go higher than 400. Social Affairs Minister Ludmilla Mullerová said she would present both options to the cabinet for a final decision. The minimum wage is currently 8,000 crowns before tax and has not been raised since 2007.
President Miloš Zeman on Friday met for the second time at Prague Castle with the head of the trade union’s umbrella organisation ČMKOS, Jaroslav Zavadil. During the meeting, issues discussed included the boosting of the economy, with Mr Zeman outlining he would sit in on a future tripartite session of the government, trade unions and business representatives. As president, Mr Zeman has promised to take a more hands-on approach than his predecessor; the next tripartite meeting is on April 25 and is scheduled to tackle issues of economic growth and the minimum wage; but the president is only expected to make the session after that, held in late June.
Beijing ends agreement with Prague – but can spat harm Czech capital?
Czechia now ahead of Spain in GDP per capita, but still below EU average
Czechs observe day of mourning for pop idol Karel Gott
Thousands pay tribute to deceased national pop icon Karel Gott
In memoriam: Karel Gott, the ‘Bohemian nightingale’