In the same interview for Hospodářské noviny, the Prime Minister commented on the scandal over the French company Areva getting excluded from a ČEZ tender, saying that the Czech energy provider was left without a choice given that Areva underestimated the price of their bid and refused to follow some rules pertaining to public tenders. Mr Nečas said that Areva, for example, refused to committed to the final price of their bid, which is against regulations. Yet, he also added that just as the ČEZ managers he was disappointed that Areva is no longer in the running, because they would have preferred a three-bid competition. The two parties still competing for the tender to expand the Temelín power plant are an American-Japanese company Westinghouse and a Czecho-Russian consortium MIR.1200.
Bohuslav Sobotka, the chairman of the opposition Social Democrats, has called on financial institution on Friday not to offer products that would comply with the second pillar of the pension reform system, which has not been approved yet by the lower house of parliament. Mr Sobotka advised banks and pension fund providers to put off offering partly private pension funds, that the government wants to introduce with the reform, until the next parliamentary elections. If the Social Democrats win a strong enough majority in the next elections, they are prepared to revoke the so-called second pillar of the planned pension reform. Even before Mr Sobotka’s announcement, the Czech branch of ING Commercial Banking as well as AXA had announced that they will not offer the new type of pension savings scheme. The remaining seven retirement plan providers are mostly likely counting on introducing the new type of financial product, if the lower house passes the bill.
Prime Minister Petr Nečas has a date with destiny this weekend, at a conference of his Civic Democratic Party in Brno. Mr Nečas will try to use a leadership election to put down a rebellion in the party ranks over tax and VAT increases. The row threatens to topple his centre-right government, so the conference is being keenly watched by everyone.
The Czech state budget showed a 51.31 billion crown deficit at the end of October, down from a 71.4 billion crown deficit in September, the Finance Ministry said on Thursday. A year on year comparison shows that the budget was 40 billion crowns higher in October of last year. The Finance Ministry says growth in revenues from VAT has been slower than anticipated. The Czech government has approved extensive spending cuts and is trying to push through a package of tax hikes for 2013 in view of lowering the gap in public spending to below 3% of gross domestic product by the end of next year.
Czech households’ debts in September increased by 1.9 billion crowns, or around one billion US dollars, to reach the total of 1 trillion and 145 billion crowns, according to figures by the Czech National Bank released on Wednesday. The debts of Czech companies in September rose by 16.6 billion crowns, and amount to the total of 964.3 billion crowns. Analysts say that despite the increase, the debts of both Czech households and companies are among the lowest in Europe.
The Czech Finance Ministry on Wednesday worsened its forecast for the country’s GDP. According to the revised prediction, gross national product should this year contract by 1.0 percent, down by 0.5 percent from the previous prediction in July. Next year, the ministry expects the Czech GDP to grow by 0.7 percent, down by 0.3 percent from the previous forecast. The ministry said an expected decline in household consumption was behind the worsened outlook.
Coalition MPs in the Chamber of Deputies on Tuesday postponed a crucial vote on a controversial tax bill until next week in the hopes that by then the troubled Civic Democratic Party will have its house in order. Six rebel MPs within the party have not budged on their promise to vote against the bill if it includes the proposed tax hikes. That has not only shaken Prime Minister Petr Nečas’ position within the party, it could bring down the centre-right government.
The lower house has voted to postpone deliberations on the controversial
tax reform package to next week, despite disagreement from the opposition.
The Civic Democrats requested the delay on Tuesday afternoon in order to
have the crucial vote take place after their party convention, due to
internal disagreements over the reform package. The discussion in the
house was scheduled to begin on Wednesday. A group of Civic Democrat MPs
met on Tuesday morning to discuss possible changes to the proposed
legislation, but again made no headway. Six rebel MPs from the party
supported the proposal to postpone Wednesday’s vote in order to have
time for discussion, but said the reform package would remain an issue of
contention even after the party convention this weekend.
The opposition Social Democrats and the leadership of the Public Affairs party did not support the motion, saying that putting off the vote on any crucial legislation such as the tax package or the pension reform would only contribute to political instability.
Criminal police have said that four of eight members of a gang arrested
last Thursday for suspected involvement in the ‘methanol affair’,
wanted to defraud the state of some 200 million crowns in unpaid taxes.
According to the head of the anti-organised crime unit, Robert Šlachta,
the police – in its sweep of arrests last week – impacted the top
echelon of a gang involved in the sale of bootleg liquor in the Czech
Republic. Among those arrested last week are businessman Radek Březina,
said by the media to have ties to the Drak liquor company, and Robert
Sedlařík, the head of the Verdana distribution firm. A court at the
weekend ordered that they and two others be remanded in custody.
Earlier, a warehouse owned by Verdana, was found to contain bottles of liquor laced with 50 percent methanol. Methanol poisoning, beginning in mid-September, claimed 30 lives in the Czech Republic. The bottles were supposedly tainted to increase product volume and profits.
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