The Czech power utility ČEZ is launching international arbitration proceedings against Albania for failing to protect its investment in the country’s energy sector. The company is filing for damages to the tune of 5 billion crowns. ČEZ’s license to operate Albania’s national grid was revoked in January over a long-running dispute with the Albanian energy regulator over tariffs and unpaid bills. Company officials say that decisions made by the Albanian authorities are incompatible with European business standards as well as being in violation of Albanian law.
A recent survey conducted by the LMC agency, which operates the website jobs.cz, has found that roughly half of Czech firms turn down job applicants with criminal records. The survey covered approached 151 different firms and the results following the presidential amnesty (which saw more than 6,000 inmates released in January) are far from encouraging.
The lower house of Parliament on Wednesday voted to accept the government’s proposed fiscal legislation for further debate. The so-called “fiscal constitution” introduces a limit for the country’s public debt; it also requires the government to come up with ways of curbing spending if the debt exceeds 40 percent of GDP. In case the public debt reaches 48 percent of GDP, the government would be legally bound to cut at least 3 percent of its spending. The opposition has called for changes to the draft legislation which they say would narrow the manoeuvring space for any future government regardless of the economic cycle.
Labour offices report an influx of clients in the wake of the presidential amnesty. According to data released by the labour ministry 4,500 amnestied prisoners have filed for immediate and long-term social support at labour offices around the country. Prisoners released from jail are eligible for immediate financial support to the tune of 1,000 crowns and regular unemployment benefits thereafter, if they fulfill the respective conditions.
The Czech state budget in January ended in a surplus of 42.4 billion crowns, the highest surplus since 2000, the Finance Ministry said on Friday. Finance Minister Miroslav Kalousek said the figure did not take into account a hike in the VAT rates which came into effect on January 1, raising the dual VAT rates by one percent. The target deficit for the entire 2013 was set at 100 billion crowns; last year, the deficit reached 101 billion, or around 3 percent of the GDP.
The unemployment rate in the last quarter of 2012 reached 7.2 percent, which was 0.7 percent more than in the same period in the previous year, according to figures by the Czech Statistical Office released on Friday. The authorities registered some 380,000 jobless people in the last three months of 2012, which was 44,000 more year-on-year. The number of those unemployed for over a year rose as well, and they now account to over 42 percent of the total number of jobless people. Analysts say the fresh data confirm a negative trend of rising unemployment. Although companies are not laying off workers en masse, those who are made redundant are having trouble finding work.
In Business News this week: The Czech Ministry of Finance cuts its growth outlook for the year to almost zero; fresh figures show 7.2 percent of Czechs were jobless in Q4 2012; passenger numbers and flights were down at Prague airport last year; spas report a halving of business in just three months; and experts say luxury flats in Prague have maintained their value.
The Czech Finance Ministry has worsened its economic prognosis for the upcoming years in a new micro-economic analysis released on Thursday. According to the new estimates, the Czech GDP will grow only by 0.1%, compared to the 0.7% that was estimated in October. The Czech National Bank has previously placed the estimate at 0.2%. The Finance Ministry has dampened its prognosis because of the anticipated slowing down of growth in the Eurozone countries, which will influence Czech exports. The analysis predicts that the economic growth will pick up in 2014, when the economy should grow by 1.4%.
Just two days remain for individuals in the Czech Republic who bought property last year, or made substantial renovations such as adding a garage, to file their property tax. Other property owners do not have to meet the January deadline and can wait to receive notification from the tax office. The property tax was raised from three to four percent as of 2013 – part of the government’s measures to generate more revenue, complementing existing austerity measures.
In this week’s business news: The Czech Republic will have to build around 13 000 charging points for electric cars by 2020; The greatest number of foreign investors have decided to enter the Czech market last year since the beginning of the economic crisis; ČEZ’s distribution license in Albania has been revokes by the government there; Czech government debt is the eighth lowest in the whole of the EU; Budvar was unable to stop rival Anheuser-Busch from having the right to register the ‘Bud’ trademark in Europe.
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