In Business News this week: The current Czech recession equals in length the longest previously recorded; the industry minister says the government will look into the issue of excessively high prices set for solar power; Becherovka loses CZK 100 million due to a spirits ban; and art collectors have spent in CZK 5.4 billion at Czech auctions in the last decade.
The Czech economy contracted by 1.1 percent year-on-year in 2012 and gross domestic product in the fourth quarter dropped by 1.7 percent in annual terms and by 0.2 percent compared to the previous quarter, according to data released by the Czech Statistical Office on Thursday. Higher taxes on consumer goods contributed negatively to the GDP drop, their annual decrease at almost 2 percent, the office said. The GDP figure is in line with analysts´ expectations. The Czech economy has been in recession since the end of 2011.
The Czech Republic is one of three countries in the world that allows companies to issue anonymous bearer shares which has long been considered a major hurdle in the fight against corruption. Czech lawmakers have now moved to end the practice – but draft legislation that would reveal bearer shares’ owners was stalled in the lower house this week when it ran into subtle opposition by a group of Civic Democrat deputies. MV has the details.
The Czech state-controlled energy giant ČEZ is looking at bids in one of the biggest investment projects in Czech history – the construction of two new blocks at the Temelín nuclear power plant. However, dropping electricity prices have raised questions over the project’s long-term profitability. To ensure the 300- or-so-billion-crowns investment pays back, the Czech government is now considering introducing fixed electricity prices.
Men and women will be subject to the same insurance and pension savings rates, according to a bill that was approved on Wednesday by the lower house of Parliament. Currently, Czech insurance companies and private pension funds offer lower premiums for women on many of their products. According to the Finance Minister, Miroslav Kalousek, the new bill had to be introduced in order to comply with the decision of the European Court that said the current system conflicts with the principle of gender equality. Opposition parties as well as Mr Kalousek himself have criticized the new regulation, which may cause insurance rates for women to drastically increase in some cases.
The incoming head of state, Miloš Zeman, says he will put a third of his salary into a new presidential fund aimed at paying off the Czech Republic’s state debt. Speaking at a town hall meeting near the country house where he spent much of the last decade, the president-elect said he was setting up the fund to draw attention to the fact that Czechs were merely paying off the growing interest on their national debt, not the debt itself. Mr. Zeman, who takes office on March 8, said he would also seek other donors.
Trade and Industry Minister Martin Kuba has said he wants the government to look into the burgeoning solar energy scandal as soon as possible. The head of the Energy Regulatory Office Alena Vitásková last week accused her predecessors of having illegally upped the prices of electricity from solar plants incurring damages to the tune of tens of billions of crowns. Meanwhile, the head of the Czech Photovoltaic Industry Association says that the audit on which Ms Vitáskova based her accusations was doctored and was intended to cover up the organization’s present failings. The government is expected to discuss the matter later this week.
Bulgarian Energy Minister Delyan Dobrev has ordered checks on energy bills issued by the Czech power distributor ČEZ and Austria’s EVN in the wake of street protests over excessive prices at the weekend. Bulgarians took to the streets in ten cities to protest over their January electricity bills which were significantly higher than in the previous month. ČEZ says the higher bills reflect increased consumption over the Christmas holidays and a harsher-than-usual winter. ČEZ recently pulled out of Albania after having its license to operate Albania’s national grid revoked. The move followed months of controversy over unpaid bills.
A badly set up state system supporting solar energy could end up costing Czech tax payers up to CZK 1 billion, the environment minister, Tomáš Chalupa, said on a TV debate programme on Sunday. The Energy Regulatory Office said on Monday that an internal audit had revealed that some of its officials had acted illegally in setting inflated purchase prices for solar power in the 2005–2011 period. The regulator said excessive charges levied under the scheme could total tens of billions of crowns and filed criminal charges in relation to the matter. Minister Chalupa blamed the situation on deputies who approved the system in 2005 and subsequent governments. He also said that solar power producers could go bankrupt and leave fields of panels for the local authorities to clean up.
According to older methodology, unemployment figures reached their highest in January in the history of the independent Czech Republic. Older tabulation methods reveal more than 10 percent of people remained out of work in the first month of 2013. That translates as more than 580,000 people without jobs. Historically, former Czechoslovakia had a higher jobless rate during the 1930s, when some 740,000 people were out of work. Under the new methodology, the rate of unemployment in the Czech Republic rose to eight percent, up by 0.6 percentage points from the previous month. According to analysts, the worsening situation on the job market was expected due to the economic recession and decrease in hiring. At the end of last month there were approximately 33,800 open positions around the country.
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