Outgoing Czech President Václav Klaus received an award from the Slovak Entrepreneur’s Association on Wednesday, the second day of his visit to Bratislava. The association praised Mr Klaus’s role in the economic transformation of Czechoslovakia and later the Czech Republic from a central economy to a free market economy after 1989. Mr Klaus served as finance minister in Czechoslovakia and then prime minister in the Czech Republic, overseeing wide-ranging but often criticised reforms in the 1990s. In Bratislava, the president – who leaves office next week – discussed the EU and slammed the union as no longer being a symbol of prosperity. An outspoken EU critic, he also downplayed the negative impact of a member state leaving the euro zone, citing the Czech Republic’s and Slovakia’s own split and successful separation of currency.
Pension funds in the Czech Republic saw profits rise by 6 percent year-on-year to 4.83 billion crowns in 2012, the Association of Pension Funds has told the Czech news agency. Pension funds registered a record number of 5.15 million clients, over half a million more than at the end of 2011. Savings made up by clients’ deposits, employers’ contributions, state subsidies and appreciation reached 247.7 billion crowns, which was an annual rise of 6 percent. In Q4 of last year alone, the number of private pension scheme clients increased by more than 474,000. The rise of interest in these kinds of savings was connected with a statutory period that restricted the possibility of signing such contracts until the end of November, APF president Karel Svoboda said.
Czech banks are facing a major confrontation with dozens of thousands of their clients that could cost them hundreds of millions of crowns. Over 40,000 people have now signed up to class actions to reclaim the fees banks charge for loan and mortgage accounts. The clients say the practice is illegal, and want their money back. The banks, meanwhile, remain defiant, saying all their charges are in line with the law.
This year’s deficit of Czech public finances should not exceed 3 percent of gross domestic product, Finance Minister Miroslav Kalousek said on Friday. Mr Kalousek’s remarks came in a reaction to an estimate by the European Commission which predicted the deficit would reach 3.1 percent of the country’s GDP. Keeping the gap below 3 percent would bring an end to the excessive deficit procedure launched against the Czech Republic by the European Commission in 2009, Mr Kalousek said. The finance minister however warned the target could only be met provided that European economy does not experience any dramatic downturn.
In Business News this week: The Czech economy is passing through the lowest point of the recession, says the head of the central bank; the EC predicts the Czech economy will stagnate in 2013; CEZ and Czech Coal are reported to be close to a deal worth a whopping CZK 200 billion-plus; 40,000 Czech customers file a class action for the return of bank charges; and a fifth of Czech medicines are being resold in more expensive markets.
Government officials have rejected the criticism. Trade and Industry Minister Martin Kuba said that it was primarily up to ČEZ to prove to the Bulgarian authorities that it had not violated any public procurement rules or any other norms. The Czech government, he said, would only make sure that the administrative proceedings against ČEZ were not politicized. Meanwhile, Foreign Minister Karel Schwarzenberg said he had discussed the matter both with Bulgarian Foreign Minister Nikolay Mladenov and EU officials in Brussels. Diplomacy is conducted behind-the-scenes, he noted.
President-elect Miloš Zeman has slammed the Czech government for not doing enough to defend the position of the Czech power utility ČEZ in Bulgaria. Mr. Zeman said it was the duty of any government to defend its companies abroad and urged the Nečas administration to use all the means at its disposal – such as EU contacts, international arbitration mechanisms and negotiations with the outgoing Bulgarian government – to defend Czech national interests. The state-owned power utility may lose its license in Bulgaria following mass protests over electricity prices. President Václav Klaus has also criticized the Czech government for taking what he called “a passive stand” in the dispute, saying that ČEZ has been made a scapegoat for the growing social unrest in Bulgaria.
The Bulgarian energy regulator announced on Wednesday morning that although proceedings aimed at revoking the distribution license of Czech energy company ČEZ have been launched, a final decision has not been made. The regulator announced that it will continue to look into possible wrongdoings and will hold hearings with the company’s shareholders in April. Czech Finance Minister Miroslav Kalousek denied the allegations of the Bulgarian authorities that ČEZ broke a number of regulations while operating in the country.
The Bulgarian operation of the Czech state-controlled energy firm ČEZ has run into serious problems after Bulgaria’s energy regulator launched proceedings to revoke its licence to operate in the country. The decision came after nationwide protests against high electricity prices centred on the Czech company which controls around 40 percent of Bulgaria’s electricity distribution market. On Wednesday, Bulgarian Prime Minister Boyko Borisov announced his cabinet was stepping down after 14 protesters were injured in clashes with the police. Ilin Stanev
Reacting to developments surrounding CEZ's position in Bulgaria, the Czech prime minister, Petr Nečas, said on Tuesday that he expected that Bulgaria, as an EU member, would adhere to its international commitments and treaties regarding the protection of investments. Mr. Nečas said he believed the dispute over electricity prices had become politicised and said comments made by Bulgarian officials were out of the ordinary. Speaking in Brussels, the Czech minister of industry and trade, Martin Kuba, said the situation was alarming, adding that he was prepared to discuss the matter with the European Commission.
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