Monday, July 1st, was the last day on which people over 35 could enter the so-called second pillar of the government’s pension insurance scheme, thereby putting part of their pension funds into private insurance companies. Despite a last-minute flurry of interest, the scheme has failed to meet expectations with less than 100,000 people taking advantage of it. So with the centre-right government on its way out, and the opposition threatening to scrap the second pillar - is this the beginning of the end of a reform that never really got off the ground?
Prime Minister designate Jiří Rusnok has so far secured six ministers for his caretaker cabinet, filling among others the posts of interior minister, justice minister and health minister. Two other key positions –the top posts at the defence and finance ministries - remain vacant. Six candidates have so far refused the prime minister’s offer and political analysts note that Mr. Rusnok is having a hard time finding professionals willing to take on a short stint in his caretaker cabinet. The caretaker cabinet’s chances of winning a vote of confidence in the lower house are also meagre.
The interior ministry gave an overpriced tender to the Czech Post in 2009, according to an audit carried out by the Czech Supreme Audit Office. The ministry allegedly did not carry out proper analysis or price comparison before awarding the 1.4 billion crown deal for creating the electronic data mailbox system and running it for the first year. As a result, the government has been paying more for this service until this year, when the ministry was able to negotiate a new pricing arrangement with the Czech Post. Ivan Langer, who headed the ministry at the time of the alleged overpriced deal, has denied any wrongdoing.
The Czech Republic's external debt grew by 42.7 billion crowns to just below 2,000 billion in the first quarter of 2013, accounting for 51.9 percent of GDP, the Czech National Bank said on Friday. The debt grew mainly on higher bank and government debts. The year-on-year, external debt rose by 65.7 billion crowns. The growth in external debt was due mainly to the banking sector’s external liabilities. Their growth was linked primarily to an increase in short-term deposits accepted from non-resident banks and non-bank clients, the bank said.
This year’s floods have claimed 15 lives and affected a total of 970 municipalities around the Czech Republic, according to the outgoing Environment Minister Tomáš Chapula. Speaking to reporters on Thursday, Mr. Chalupa said that towns and cities have so far used more than 750 million crowns from the Finance Ministry’s emergency fund for post-flood expenses, and 200 million more were recommended to be released for repairs. Some 50,000 police officers and fire fighters as well as 10,000 soldiers helped with the flood defense preparations and rescue efforts, having helped evacuate over 26,000 people and rescued around 600.
Members of the centre-right coalition have again confirmed they will not
back the Rusnok government in a confidence vote as long as they hold a
majority in the Chamber of Deputies. Speaking to the daily Právo,
Finance Minister Miroslav Kalousek derided the new government as a
“cabinet of friends of Miloš Zeman” and not a government of
“experts”. He warned it would neither pass in the lower house nor see
state budget for next year approved, raising the risk of a provisional
The coalition’s candidate for prime minister, Miroslava Němcová, meanwhile, slammed President Zeman’s decision to ignore the balance of power in the Chamber of Deputies as irresponsible; she stressed that the new cabinet would not get any support from her party . The centre-right coalition, which collapsed following the resignation of former prime minister Nečas, will not push for early elections as long as they have a majority.
President Zeman has fully met his financial obligations stemming from the presidential election campaign, the head of his office Vratislav Mynář told journalists on Friday. The president covered the final expenditures this week, thanks to a financial gift from the party of Citizens’ Rights which he set up and of which he is honorary chairman. The 35,000 crowns left on his campaign account will reportedly go to a children’s charity. In line with a new law on direct presidential elections, all candidates in the running had to have a transparent account.
In Business News this week: Russia’s Rosneft signs deal to deliver crude oil to Czech Republic; political instability could delay announcement of Temelín tender winner; poll suggest only quarter of Czech businesspeople want euro; domestic banks “stable and resilient” says CNB; and truck-maker Avia to close Czech factory.
According to the internet daily E15 the head of the Czech energy company ČEZ, Daniel Beneš, and the head of Czech Railways, Petr Žaluda, actively assisted the practice of securing bribes for politicians. The police are reported to have tapped their phone conversations with the prime minister’s chief of staff Jana Nagyova, some of which are directly related to the corruption scandal surrounding three former Civic Democrat MPs. The police is also reported to have raided the home of Tomas Jindra, advisor to Trade Minister Martin Kuba and Agriculture Minister Petr Bendl, both from the Civic Democratic Party.
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