The Czech power giant ČEZ will be allowed to keep its license to operate in Bulgaria, after the country’s energy regulator confirmed there was no reason to revoke it. Earlier this year, Bulgarian authorities launched an investigation into whether ČEZ was unfairly increasing electricity prices to its customers in response to widespread public protests that triggered the fall of the centre-right government. ČEZ rejected claims of irregular practices and said that if its license was revoked it would take the matter to a European court of law.
This week in business news: Prime Minister Rusnok voiced his support for the National Bank’s intervention against the crown; The national bank improves its prognosis for economic growth in 2014; Unexpectedly, the economy contracted in the third quarter by 0.5 percent; Bulgaria’s energy regulator has allowed ČEZ to keep its distribution license in the country; Ryanair will renew flights between Dublin and Prague; Amazon faces opposition from local residents; Petr Kellner’s PPF buys the O2 Arena in Prague.
Contrary to expectations the Czech economy contracted by 0.5 percent quarter-on quarter, breaking a brief period of economic revival following the country’s longest recession ever. Year-on-year GDP contracted by 1.6 percent, according to the Czech Statistics Office. Analysts had predicted 0.5 percent growth in the third quarter. The contraction is being attributed to lower output in several key sectors, including energy, construction and agriculture. To help growth, the central bank cut its key interest rate to a record low of 0.05 percent and began using foreign-exchange interventions to weaken the crown.
There was some relief a few months back when, after its longest recession ever, the Czech economy finally registered growth. However, hopes that a corner had been turned may have been a little over optimistic; preliminary figures released on Thursday suggest that the third quarter saw a fresh GDP contraction of 0.5 percent.
ANO party chairman and businessman Andrej Babiš is considering making the publishing house MAFRA, which he purchased earlier this year, a publicly traded company. On Wednesday, Mr. Babiš said that before this happens, he is also planning to make other purchases in the media sector. He wants to be a minority shareholder in any of his traded companies. Mr. Babiš also owns the holding company Agrofert, which is one of the largest firms in the Czech Republic by revenue.
Deans of five Prague universities have called for a major change in financing for scientific research in higher education institutions in the Czech capital, at a joint press conference on Wednesday. If overall financing for sciences and access to EU funding for Prague universities does not improve, the deans warned that institutions will soon not be able to meet European standards of education and research. The access to EU funding for Prague universities has been limited by law. As a result, funding for research and innovation in other regions has been steadily growing, while in Prague it has stagnated. The situation will most likely not change in the next three years according to current government plans.
The Czech National Bank’s decision to depreciate the crown through interventions on international currency markets has surprised many, from analysts to the country’s industrial sector. The bank argues that it had run of out ways to combat looming deflation that could undermine the Czech economy’s nascent recovery. But critics question the effectiveness, the timing and the costs of the move.
Czech retailers of computers, home appliances and other electronic goods have reported massive sales over the weekend in the wake of the Czech central bank’s intervention against the Czech crown. The news agency ČTK reported on Monday that sales in some chains as well as online shops increased by as much as 35 percent. The retailers believe that customers are buying Christmas presents before the central bank’s takes effect and increases the prices of imported goods.
The Czech unemployment rate in September remained at 7.6 percent, unchanged from the previous month, according to government figures released on Friday. The country’s labour offices registered over 550,000 job seekers last month, which was 377 less than in September. Compared to the same month last year, however, there were nearly 60,000 unemployed people more. Analysts say the Czech labour market has stabilized but expect a slight increase in the number of jobless people in the coming months.
In Business News: the Czech National Bank has moved to weaken the crown, interest rates have been left unchanged at an all-time low, the PPF investment group has signed a deal to buy a majority stake in Telefonica Czech Republic and the clothing retail chain C&A is curbing its expansion plans after seeing a drop in profits.
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