European leaders meeting in Brussels have agreed a timetable for the creation of a single banking supervisor for the eurozone. All 6,000 banks in the eurozone would be regulated by the European Central Bank; a mechanism that would essentially create a European banking union. But several countries are extremely sceptical, and they include the Czech Republic.
Prime Minister Petr Nečas, who has come under fire for his party’s defeat in the weekend regional and senate elections, has expressed readiness to temper some of the government’s reforms. At a stormy meeting of the Civic Democratic Party’s executive council on Monday Mr. Nečas presented the party leadership with an alternate tax-hike proposal according to which only the lower VAT rate would be raised from 14 to 15 percent next year while the basic higher rate would remain unchanged at 20 percent. The government’s original tax-package that called for a 1-percent hike in both VAT rates was rejected by the lower house of Parliament with the help of six rebels from the prime minister’s Civic Democratic Party. Mr. Necas has also expressed readiness to revise some steps in the area of social welfare benefits.
The Šumava National Park is laying off employees after getting lower funding from the Environment Ministry. The park’s management said it had been forced to sack thirty people in order to be able to operate on a reduced budget next year. Due to austerity measures the ministry has slashed 11 million crowns from its budget, bringing the overall sum down to 319 million crowns in 2013. The National Park said it would be effecting other cost costing measures such as selling 25 percent of its car-park.
With the fall of communism, it was not long before foreign investors began taking an interest in Czechoslovakia. This ranged from huge industrial multinationals to young college graduates, who arrived in Prague with backpacks in the early 1990s, and happened to spot a business opportunity. Many burned their fingers; some made a quick buck and disappeared, and others settled down and stayed here for good. In 1991, Radio Prague interviewed a few of these pioneering investors.
Iraq has agreed to buy 28 Czech-made L-159 jet training aircraft for 19.2 billion crowns, or around one billion US dollars, a spokesman for the Iraqi prime minister told the Reuters news agency on Friday. Iraqi PM Nouri al-Maliki is in Prague on a working visit, heading a political and business delegation. Details of the deal have been agreed at a meeting of the Czech and Iraqi defence ministers. Four planes will be shipped to Iraq within seven months’ time while the remaining 24 aircraft will be newly produced and delivered in two years. The Iraqi contract is the first successful sale of the aircraft which the Czech government has been trying to sell for years.
Czech fuel prices are reported to have decreased in the past week, with petrol Natural 95 selling for 37.93 crowns a litre, a drop of 0.10, and diesel oil prices down by three hallers to 36.90 crowns per litre. Analysts say the drop is marginal in view of the price hikes over the summer and give drivers little hope of a significant decrease in the coming months.
The Czech Banking Association, in its updated forecast, made clear on Wednesday it expected the Czech economy to contract by almost one percent this year, while back in July it forecast a 0.6 percent drop. CBA representatives discussed the downward revision as related largely to a fall in household consumption. The government´s austerity measures and unstable expectations of further development had contributed to the forescast change. The CBA also cut its forecast of GDP development for next year: the association now expects growth of less than 0.5 percent, while in July it estimated one percent growth.
The Czech unemployment rate grew slightly in September to reach 8.4 percent, up by 0.1 percent in the previous month, according to figures released by the Czech Statistical Office released on Monday. The number of people seeking employment grew by some 6,500 while there were around 4,000 fewer vacancies registered in that month. The lowest unemployment rate – around 3.5 percent – was recorded in Prague while the highest rates was seen in the north Bohemian district of Most with 15.8 percent and the district of Bruntál, in the north-east of the country, with 15.6 percent.
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