The Czech finance and agriculture ministers have come up with proposals on Wednesday that would help alleviate the ban on hard liquor that was instituted on Friday, 14 September. Finance Minister Miroslav Kalousek proposed to print new excise stamps, which would be attached to newly produced or imported bottles of alcohol. The new stamps would clearly let consumers know that the alcohol has been produced or imported after the ban and that its origin has been verified. Agriculture minister Petr Bendl said he wants to introduce so-called birth certificates for liquor bottles that would make their origin and ingredients clearly traceable. Prime Minister Petr Nečas said both measures will be part of a government directive that should be ready on Thursday.
The recent outbreak of methanol poisonings from bootleg liquor has drawn attention to the Czech alcohol market and its regulation. Up to 25 percent of all spirits sold in the country is estimated to come from illicit producers; the Czechs also have some of the highest alcohol consumption levels in the world. So has the state failed to control the liquor market and protect consumers?
A controversial government bill on tax hikes which was earlier rejected by the lower house is going back for a repeat vote linked to a vote of confidence in the center- right government. The prime minister is still hoping to reach agreement with the six rebel deputies from his own party who scuppered the legislation and remain vehemently opposed to the proposed hike in VAT. The threat of the government falling is not imminent however since the deputies in question have agreed to support the bill in its first reading and propose changes later. This gives the prime minister an extra thirty days in which to come up with a compromise solution.
The Defence Ministry is selling unused land and property in order to be able to save money. Close to 40 buildings are being put on the market including a hotel, a spa and wellness facility and unused military barracks hat can serve as storage facilities. Last year the ministry sold property to the tune of 364 million crowns, this year it is hoping to increase its budget by 426 million.
Several liquor producers have issued statements criticizing the government for having neglected the problems with bootleg alcohol for years and say that the broad ban on spirits will severely damage their finances and reputation. The Jan Becher company that makes the country’s famous Becherovka liquor has turned to the European Commission for help. Some hard drink producers have quickly changed their production plans in view of the ban on imports from Poland and Slovakia and are focussing on other buyers.
In this week’s business news: The Czech national debt has risen by almost 10 percent in the first half of 2012; Real estate prices are dropping for the second quarter this year, while land prices are on the rise; Škoda Auto will introduce a new Fabia specifically for the Indian consumer; Fuel prices are breaking record highs again this week; a number of operational programmes in the Czech Republic will not get the EU funds they were counting on.
The market prices of apartments continued to drop in the second quarter of 2012, according to figures by the Czech Statistical Office released on Thursday. The prices of older flats decreased by 5.7 percent while the prices of new apartments in Prague fell by 3.4 percent. Analysts say the continuing decrease in apartment prices is related to the construction of new housing projects.
Six MPs of the ruling Civic Democrat party, who last week torpedoed the government’s plan to raise the VAT rates, said the rates should be kept on the current level next year. After a meeting with the head of the Civic Democrat deputies’ group, the MPs said the only alternative was to unify the VAT rates into a single rate. Their support will be crucial in a repeat vote on the government’s tax legislation which has been linked to a vote of confidence. Party leaders said they still hoped to find a compromise solution.
The European Commission has refused to pay around one billion euros into four Czech operational programmes over errors in their administration, the news website aktualne.cz reported on Thursday. The subsidies have been cut for the Transport, Environment, Enterprise and Innovation programmes as well as for the Regional Operational Program South-West. The programmes will have to be subsidized from the state budget and the budget of two regional authorities. Government officials have refused to comment on the matter. The website reported that funding might also be cut for other Czech operational programmes.
The government will meet to debate the 2013 budget on Wednesday. The budget is tailored to a 100 billion crown deficit which should bring the gap in public finances to under 3 percent of the GDP. Expenditures are projected at 1,185 billion crowns, revenues at 1,085. The proposed budget hangs on the approval of government proposed tax-hikes which parliament recently rejected and which the government sent back unrevised linked to a vote of confidence in the Nečas administration. The government is also expected to discuss measures taken in connection with the methanol poisoning scare.
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