The Supreme Audit Office has found huge discrepancies in operation costs at various public institutions, the ctk news agency reports. For instance the differences in cost in procuring office equipment or vehicle maintenance were huge and some institutions paid ten times more than others for employee education programmes. Finance Minister Andrej Babiš has repeatedly criticized what he calls squandering of public funds at ministries and public institutions and the government is planning to introduce central purchasing as a way of saving money and bringing greater transparency to the process of public procurement.
For the most part being a supervisory board member on a Czech state company looks like a highly paid form of pre-retirement pension for politicians who’ve past the sell-by date. The demands are light and the rewards relatively high. But the latest controversy over supervisory boards fails to address the main problems.
Coalition parties appear to have patched up but not fully resolved their clash over the share out of seats on supervisory boards of state companies. Last week’s move by ANO leader and finance minister, Andrej Babiš, to replace a swathe of board members at state controlled power company ČEZ with his nominees created anger, particularly from the smallest party the Christian Democrats, which found it had no representative on the board. Wednesday’s meeting of party leaders resulted in agreement that the Christian Democrats would put forward its candidate to be reviewed by the finance ministry. Social Democrat leader and prime minister Bohuslav Sobotka admitted afterwards that full agreement had not been reached. ANO bosses continued to argue that the ministry responsible for the state company should have the right to decide how to fill the board, a policy which is in conflict with the share out policy of recent years.
The Czech economy performed beyond expectations at the start of the year. Revised figures by the Czech Statistics Office show that in the first three months of 2014, gross domestic product grew by 2.9 percent year-on-year, the highest rate since just before the start of the economic crisis six years ago. I spoke to analyst Jan Bureš of the ERA bank about the latest figures.
A cut in Value Added Tax to 10 percent for books, baby food, and drugs was approved by the government on Wednesday at its regular weekly meeting. The reduce rate of sales tax should come into force from the start of 2015. Babies’ nappies did not make it into the basket of tax reduced items because of fears that a reduction here would conflict with European rules. The introduction of a reduced rate of tax is one of the government’s flagship measures. The Cabinet also agreed to abolish charges for visits to doctors and hospitals with the exception of use of emergency services.
Czech gross domestic product grew by 2.9 percent year on year and 0.8 percent quarter on quarter in the first three months of this year. The revised figures, released on Tuesday, are higher than a previous estimate published four weeks ago. The growth rate was the highest since the 2008 financial crisis. It has been attributed to rising domestic and foreign demand, particularly from Germany, and a very low base last year.
An intervention by Finance Minister Andrej Babiš in the Czech state-run energy giant ČEZ has annoyed his party’s coalition partners. Mr Babiš’s ministry has replaced seven out of eight members of ČEZ’s supervisory board, ignoring informal but well-established rules about sharing board seats with other parties in the cabinet. The conflict over the control of the Czech Republic’s most important state corporation could destabilize the country’s centre-left government.
Finance Minister Andrej Babiš has come under fire for effecting a shake-up on the supervisory boards of state-run companies such as ČEZ, Český aeroholding, Mero and Čepro. The Christian Democrats of the ruling coalition have criticized the fact that they were not consulted about the extensive personnel changes while the opposition parties accuse the minister of handing out lucrative posts to his friends. The finance minister has rejected the accusations, saying he had replaced political figures with experts in the field.
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