Czech travel agencies expect that the price of package vacations to foreign destinations will go up by around 10 percent, according to Czech Radio’s Regina. Agencies are reacting to recent intervention to weaken the Czech currency by the central bank in a bid to stimulate consumer spending prior to increases, help exporters and overall boost the economy. Travel agencies are reportedly trying to keep the prices of so-called ‘first minute’ vacations the same.
An investigation by the anti-corruption police unit uncovered no proof of corruption or other wrongdoing in the financing of Jan Fischer’s presidential campaign. Mr Fischer, the finance minister in the current interim government, came under suspicion after unpaid debts were resolved quickly following his naming to the cabinet in July. The case was shelved by the state prosecutor overseeing it, Jan Lelek, after the police failed to produce evidence a crime was committed. He told the Czech News Agency he expected the police would do the same.
Trading firms’ obligation to check their business partners’ VAT records has won the Absurdity of the Year award, the organizers said on Thursday. The respective legislation, which came into force last year, was supposed to curb tax evasion. However, critics say the state in fact transferred its responsibility for tax collection onto private companies which have to make sure their business partners have paid the value added tax. If they fail to do so, the companies face the risk of themselves having to pay VAT for their business partners. The 7th annual Absurdity of the Year awards also highlighted the fact that the Czech authorities reject tax returns in the pdf format.
The Czech economy could return to recession, the vice governor of the Czech National Bank, Vladimír Tomšík, told an economic forum on Wednesday. Mr. Tomšík referred to recently released preliminary figures suggesting that there had been a 0.5 contraction in GDP in the third quarter of this year. The previous quarter had seen the first growth in a year and a half, bringing to an end the Czech Republic’s longest ever recession. Mr. Tomšík said the central bank aimed to keep the Czech crown at around 27 to the euro, which is where it has been since the bank intervened to weaken it two weeks ago.
The government in resignation has approved a loan of CZK 1 billion to the country’s biggest health insurance company VZP. The minister of health, Martin Holcát, confirmed the decision after a cabinet meeting on Wednesday. The interest-free loan fills a large gap in the VZP’s budget and means it will now be able to meet payments for health procedures for the rest of this year. The government approved another loan, for CZK 700,000, three weeks ago. The combined figure is less than the CZK 2.5 billion that the loss-making insurer had been seeking.
The central bank’s recent intervention against the crown has triggered a shopping fever, the internet news site novinky.cz reports. Retailers and e-shops report a steep increase in sales particularly electronics where the predicted price hike is expected to be significant. Alza.cz says its sales have doubled since the announcement and internet stores selling electronics and household appliances report a 200 percent increase in sales. The National Bank is intervening on forex markets to weaken the crown which is expected to increase the price of imported goods, products made from imported materials and petrol.
Potential coalition partners, the Social Democrat and ANO parties, remain divided on tax policies, Social Democrat leader Bohuslav Sobotka said. The parties are in talks on forming a coalition government along with the Christian Democrats; they have agreed on a series of issues including austerity measures, ways to boost economic growth, and others; however, the ANO party refuses the Social Democrat plans to raise corporate taxes and to introduce property checks. Leaders of both parties are to meet again on Saturday.
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.
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