Representatives of unions, industry and the government met on Friday for three-way talks on the proposal for next year’s budget. Union and industry representatives said that the finance ministry’s draft budget was not conducive enough to economic growth and that the caretaker government should not be so strict in complying with the EU-mandated deficit ceiling of three percent of the GDP. After the talks, Prime Minister Jiří Rusnok announced that the government will not change the 112-billion crown deficit proposed in the draft budget, which is just below three percent of GDP. The outgoing government will be voting on the final proposal next Wednesday, though it will not be discussed by the lower house of parliament until after the general elections in late October. The budget proposal may be significantly altered by the new government and lower house.
Prime Minister Jiří Rusnok told reporters on Friday that if the owners of the Paskov mine in northern Moravia were to act as gentlemen in negotiations with the government, it would be possible to keep the mine open until 2016. The mine’s owner OKD announced earlier this week that it is planning to close the mine by the end of 2014, claiming that it has not been profitable for some time. The mine currently employs some 3,000 workers, in a region that already has high unemployment. OKD said that with financial help from the government, it would be willing to keep the Paskov mine open longer, but on Wednesday Prime Minister Rusnok refused to provide any subsidies to the firm. The government will open negotiations with OKD’s shareholders next week in an effort to keep it open for another three years.
The Prague 10 town hall is willing to pay 43 million crowns for the former residence of the famous writer Karel Čapek. Although a foreign bidder has offered a higher price, the villa’s owner, Karel Scheinpflug has indicated that he would be willing to sell it for the lower price to the local administration. The local town council will vote on the proposal to buy the villa on Monday. Cultural Minister Jiří Balvín has expressed interest in speaking at the council meeting in support of the decision. Karel Čapek and his painter brother Josef had the villa built for them in the early 1920’s. Only the half where Karel lived is currently for sale. The writer’s study has been preserved as it appeared during his lifetime. The Prague 10 council plans to open up a part of the residence to the public, if the sale goes through.
Business News: Czech consumers can look forward to cheaper electricity prices, Paskov mine facing closure after government refuses bailout, Czech Photovoltaic Association may challenge the law restricting support for renewable energy sources and 2014 draft budget projects public spending gap below 3 percent of GDP.
A state attorney has filed criminal charges against the head of the Energy Regulatory Office, Alena Vitásková, and nine other people, on suspicion of fraud in obtaining licenses for two solar power plants in north Bohemia in 2010 in view of upping the purchase price for solar power. The damage to the state is estimated at 1.9 billion crowns. The case is to be dealt with by the Brno regional court. Ms. Vitásková had previously accused her predecessors of having illegally upped the prices of electricity from solar power, producing an audit that the head of the Czech Photovoltaic Industry Association said was doctored and was intended to cover up her own illegal activities.
The Czech Republic is in 52nd place on the Economic Freedom of the World Index published by the Canadian institute Fraser. The index, which was made public at a press conference on Thursday, is based on data from 2011 and monitored 152 countries. It is based on a number of indicators, among them the size of the public sector, the quality of legislation, foreign trade and overall regulation. Monetary issues and inflation are also taken into consideration.
Czech Finance Minister Jan Fischer has proposed a draft state budget for 2014 with the deficit of 112 billion crowns. Mr Fischer told a news conference on Wednesday he had originally planned a deficit of 110 billion crowns but that he now expected an extra 4 or 5 billion in tax revenues. The minister said the target of 3 percent of GDP would not be exceeded. The government will discuss details of the draft budget with employers and trade unions on Friday, and is set to vote on the proposal next week.
The European Commission has approved a major dust control project for two steelworks in northern Moravia, a spokeswoman for the commission said. Two projects worth some 1.2 billion crowns should lower the volume of dust emitted by Třinecké železárny and the Ostrava plant of ArcelorMittal by around 230 tonnes each year, significantly reducing air pollution in the area. Třinecké železárny is planning to start work on dust reduction immediately. A spokeswoman for ArcelorMittal said dust filters should be installed in 2016.
The Czech government on Wednesday approved a plan to increase funds for state-covered health insurance, PM Jiří Rusnok said. The cabinet plants to increase payments for children, retired people and other groups whose health care insurance is covered by the state from the current 723 crowns a month to 773 crowns. That would mean an extra 4.7 billion crowns for the system. Health Minister Martin Holcát had earlier proposed an increase by 7.2 billion. At a time when the lower house of Parliament is dissolved, the caretaker cabinet is planning to ask the Senate to approve the respective legislation.
Czech households’ electricity bills will be lower next year as the country’s dominant electricity producer ČEZ has announced it will slash its prices, and its rivals are expected to follow suit. ČEZ said that its most popular tariff will be 15 percent cheaper, and it has also offered its clients a two-year fixed tariff at an even lower price.
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