The prime minister has announced that the Czech delegation to Brussels will strongly voice their disapproval of the proposed EU budget for 2014-2020 at an EU summit later this week. Yet, the prime minister said on Wednesday that he is not planning to veto the long-term budget proposal, unlike a number of other EU members. The priority for the Czech Republic is to remain a net recipient of EU funds and to prevent a decrease in spending for cohesion policies.
The cabinet has approved a new 2013 draft budget, reflecting the present economic situation and government-proposed austerity measures. The new budget proposal has a projected 100 billion crown deficit and a net decrease in revenues and expenditures of 4 billion crowns, compared to the previous budget proposal. The deficit set by the proposal makes up 2.9 percent of the GDP. This is the third budget proposal that the Finance Ministry has submitted. The Chamber of Deputies is set to hold the first hearing on the budget next Wednesday.
The Czech economy has now been in recession for 15 months, which is the longest period since the late 1990s. The ongoing crisis in the eurozone, low household demand as well as the government’s austerity measures are all considered to be the major factors behind the faltering economy. Last week, the Prague-based Banking Institute – College of Banking held a conference focusing on ways of restarting economic growth. One of the keynote speakers was Jens Arnold, a senior economist at the international economic organization OECD. He suggested that raising
Cards issued under a new electronic system streamlining welfare and social benefit payments will – in the end – not be compulsory. The prime minister made the announcement on Tuesday, making clear the system – which has come under criticism from both non-governmental organisations and political circles – will be revised.
The Czech National Bank sees no reasons for the policy of quantitative easing, the bank’s governor, Mojmír Hampl, told a conference in Prague on Tuesday. The problems of the Czech economy differed from those of the countries which opted for the move, Mr Hampl said; the Czech Republic has a stable financial sector, it does not have issues with liquidity and does not face the threat of the so-called deflation trap. Governor Hampl also suggested there was a big difference between the real and the perceived state of the economy whose foundations were sound.
The Czech Republic could receive some 30 percent less money from EU’s cohesion funds in the period of 2014-2020 as a consequence of the bloc’s tighter budget, Czech Foreign Minister Karel Schwarzenberg said. Between 2007 and 2013, some 26.7 billion euros was earmarked in the funds for the Czech Republic. The cuts are likely to affect all EU member states, according to Mr Schwarzenberg.
The Ministry of Finance has presented the government with a new draft budget for next year. Because of a worsening of the macroeconomic outlook the budget figures with incomes and expenditures that are CZK 4.1 billion lower than originally planned. The new version projects a deficit of CZK 100 billion and the deficit is expected to remain at 2.9 percent of gross domestic project. The government will present the budget for approval by the Chamber of Deputies on November 23.
CEZ has complied with the ruling of a court in the Albanian capital Tirana to reconnect electricity supplies to the country’s state-owned water utilities, which owe the Czech power giant 38 million euros, a spokesperson said. The company had disconnected the water utilities on Friday after negotiations had failed to retrieve the debt. The move had put some petrol stations out of action and led to a cut in the supply of water to households and firms. Albanian police on Saturday forced CEZ employees to reconnect the power supply. CEZ has not ruled out taking the issue to a court of arbitration if the debt is not settled.
The Albanian division of the Czech energy giant ČEZ has begun to disconnect electricity supplies to Albania's state-owned water utilities that failed until now to settle long-term debts, ČEZ spokeswoman Barbora Pulpanová has revealed on the company's website. The total sum of receivables from such companies has reached the equivalent of 971 million crowns (the equivalent of 37 million euros) the spokeswoman revealed. ČEZ has moved to cut off the water utilities from electricity after a series of negotiations with Albanian representatives failed. The Czech supplier said it had repeatedly invited the water utilities to settle their debt and had repeatedly postponed settlement deadlines – an apparent attempt to avoid the current situation.
In Business News this week: The Czech economy is in recession for the fifth quarter in a row; every other Czech household has no system for organising its monthly budget; government bond sales exceed expectations; a new transformer facility should help protect the Czech power grid against Germany’s green electricity; the organizers of the Davis Cup final say they will make 10 million on the event; and the Czech football association plans to buy the world’s largest stadium.
Olga Lomová: Western misconceptions could let China export much of its system and ultimately contribute to our enslavement
Hitler no ‘gentleman’, but court rules Czech state need not apologize for president’s claim Ferdinand Peroutka said so
Bertha von Suttner – Prague-born peace campaigner whose ideas on cooperation and disarmament continue to have lasting effect
Forgotten Czech net bag makes a comeback
Iconic Czech brands that survived competition from the West after the fall of communism
Communist party official shocks nation ahead of freedom celebrations
Czechs and Germans in 1930s Czechoslovakia: a complex picture
Cold War “king of Šumava” story brought to life in new film by Irish director