Public health insurance providers are finishing the year with approximately 10 billion crowns in losses. Insurance providers should receive around 10 billion crowns more next year, but healthcare providers are also likely to loose around four billion due to the weakening of the crown and the increased Value Added Tax for medicine. The Constitutional Court recently struck down the law that imposed the 100-crown daily fees for hospital stays and the 30-crown co-payments at the doctors’ offices, which will decrease the yearly fee income of healthcare providers from 5.5 billion to 180 million crowns. Jiří Rusnok’s caretaker government gave 800 million crowns extra to health insurance providers this year, but doctors and hospitals are warning that if the new government does not find a solution to the situation, health care may need to be limited and some hospitals may even close next year.
The Czech Academy of Sciences has breached the rules the distribution of grants, according to a report by the country’s Supreme Audit Office. The report says that grant applications were not processed transparently over the past six years, and in some cases, the academy could not show how they were processed at all. The institution also made errors in approving investments and purchases of scientific instruments.
Overall confidence in the Czech economy increased slightly in December for the fifth consecutive month. According to figures released by the Czech Statistics Office the economic sentiment indicator in December increased by one point as compared to November to 5.5 points. Confidence increased in trade and selected services. Confidence in industry remained unchanged and in construction it slightly decreased. Business confidence has been rising while consumer confidence remains virtually unchanged, statisticians said.
The High State Attorney in Prague has charged 12 people over contracts awarded by the Czech government during the country’s EU presidency in 2009, state attorney Tomáš Černý said. The prosecutors say that contracts for audiovisual services, awarded to the firm Promopro during the six-month period, were overpriced by 338 million crowns. Among those charged with manipulating public tenders and abuse of office are three former close associates of Alexandr Vondra, who was deputy prime minister for European affairs when the alleged offences took place. Mr. Vondra himself has not been charged.
This week in business: Lower house approves next year’s budget; The crown hits a four-year low; Economic confidence went up in December for the fifth consecutive month; Businessmen Daniel Křetínský plans to buy the Axel Springer Ringier publishing group; Ostrava-based company Technoexport has won a contract to modernize two oil refineries in Iraq; Czech trams set to begin operating in Washington DC next year.
The Czech anti-monopoly authority has prohibited labour offices from using their IT system for welfare payments, a spokesman for the Labour and Social Affairs Ministry said. The ban came into effect on Wednesday. The anti-monopoly authority imposed the ban due to the fact the system, which was introduced last January, was chosen without an open tender. The ban will not affect welfare payments for December which have already been sent, a spokeswoman for the labour office said. Former labour and social affairs deputy minister, Vladimír Šiška, is being prosecuted on corruption charges in the case.
President Miloš Zeman will appoint the outgoing prime minister, Jiří Rusnok, to the board of the Czech National Bank board in March, the daily Hospodarské noviny reported on Wednesday. The news was confirmed by the president’ spokesperson. Mr. Rusnok, who has already indicated he would accept the position, would replace Eva Zamrazilová, whose six-year term is due to expire shortly.
The central bank board on Tuesday voted to keep interest rates at an all-time low and continue forex interventions designed to keep the crown’s exchange rate close to 27 crowns to the euro. The bank has sold 200 billion crowns ($9.94 billion) since the start of interventions two weeks ago, with the crown now trading at around 27.62 to the euro. Interest rates have been at a historic low for over a year with the basic rate at 0.05 percent. The central bank forecasts that GDP will rise by 2.1 percent in 2014 with the help of interventions and inflation will return to the bank's 2 percent target, from below 1 percent seen in October.
The three parties of the emerging centre-left coalition have released the
details of the future government’s policy programme. The Social
Democrats, ANO and the Christian Democrats plan no tax hikes next year as
they agreed to postpone any changes to the tax system for 2015. The
emerging coalition would however like to raise the taxes on betting and
lottery, and cut the VAT rates on medicines, books, and other goods. The
three parties plan to raise pensions and the minimum wage, and to scrap
direct payments for medical care; they want to invest more into transport
infrastructure, and pursue self-sufficiency in basic foodstuffs. The
agreement also suggests the next government will only go ahead with the
expansion of the Temelín nuclear plant if it’s economically viable.
Christian Democratic leaders are to discuss the agreement at the weekened while ANO is set to debate it next week. Leadership of the Social Democrat party, meanwhile, approved the deal unanimously on Friday.
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