President Miloš Zeman has said he will push for the country’s entrepreneurs to contribute to reducing the country’s national debt, in return for privileges such as taking part in the president’s business missions abroad. The president himself announced shortly after taking office that he would send part of his monthly salary to a special account set up for that purpose. The country’s national debt now stands at more than 1.6 trillion crowns.
The Social Democrats top all election surveys ahead of the upcoming early general election. The party, which has spent the last seven years in opposition, promises voters economic growth; they want to icrease government spending and invest more into health care, education and other fields. All this is to be paid for by, among other things, higher taxes. In this edition of Marketplace, I discuss the Social Democrat’s economic policies with the party’s economic expert and shadow finance minister Jan Mládek.
Unemployment among university graduates is a growing problem. According to labour office statistics 32,000 university graduates are unemployed, some having failed to find work for several years. The results of a survey among university students conducted by Student Media suggest that fear of unemployment is high, with only 12 percent of students confident of their ability to find work. Forty percent of respondents said they were seriously considering applying for work abroad on graduation.
Prague 10 municipal council approved a plan to buy a villa in the Vinohrady district of the capital which once belonged to the writer Karel Čapek. The municipality earmarked nearly 44 million crowns for the purchase. The villa, built in the 1920s, houses part of the writer’s archive, his library and some of his personal belongings. The owner, a distant relative of Karel Čapek’s wife, had been offered a higher price by other interested buyers but said he wanted to sell the property to Prague 10. The villa should eventually be open to the public as a museum dedicated to the writer.
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.
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.
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.
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