Politics & Economics

Czech Economy Shrinks Again as Foreign Demand Sags

The Czech economy unexpectedly contracted on a quarterly basis in the July-September period, preliminary statistics office data showed on Tuesday, as a drop in foreign demand pulled the country back towards recession. Czech gross domestic product declined 0.3% in the third quarter, missing a median expectation that it would stagnate and contracting by more than all but the most pessimistic analyst had forecast in a Reuters poll. On a year-on-year basis, the economy shrank 0.6%, deeper than the median forecast for a 0.3% drop. The economy had pulled out of a recession in the first half of 2023 but is struggling to recover from last year’s surge in inflation, with consumer activity still weak and firms reporting shrinking order books from domestic and foreign clients. The statistics office did not break down the preliminary data but said foreign demand negatively impacted the quarterly result, while domestic demand stagnated. The Czech data is the first insight into third-quarter growth in central Europe, where Hungary, Poland and others have also felt the impact of soaring prices for energy, food and other goods and are slow to recover. “This weakness in the (Czech) economy also increases the likelihood that the central bank will...

by Karolina Kubičková Oct 31, 2023

Prague Remains Committed to Supporting Ukraine’s Sovereignty, Czech President Says

Prague remains committed to supporting Ukraine’s sovereignty, said President Petr Pavel during an Oct. 27 meeting with foreign ambassadors – a meeting to which the Russian ambassador was not invited. “If Ukraine falls, we all fall,” Pavel said, adding that “current conflicts” cannot be resolved by simply listening to both sides and drawing an imaginary line somewhere in the middle, amid gross violations of international law in Ukraine and Russia’s attacks on innocent people. He also called for listening to the opinions and problems of other people with empathy and respect, without prejudice or judgment. Meanwhile, the third Ukrainian Peace Formula meeting started in Malta on Oct. 28 at the level of foreign policy and national security advisors, with more than 65 countries participating. Previous meetings were held in Copenhagen, Denmark, and Jeddah, Saudi Arabia. The goal is to hold a Global Peace Summit at the level of heads of state and government. In November 2022, at the G20 summit, Ukrainian President Volodymyr Zelenskyy presented a 10-point peace formula, including the restoration of Ukraine’s territorial integrity, the withdrawal of Russian troops, the release of all prisoners, a tribunal for those responsible for the aggression, and security guarantees for Ukraine. German...

by Prague Morning Oct 30, 2023

Czech Defense Minister Calls For Withdrawal From UN Following Israel Ceasefire Resolution

Czech Defense Minister Jana Černochová, expressing outrage at a United Nations General Assembly resolution calling for Israel to cease its operations in the Gaza Strip, called for the Czech Republic to withdraw from the UN on Saturday. “I know that today is an important day for [the Czech Republic] and we want to celebrate our 105th anniversary. But this simply cannot be time-barred, forgive me. Exactly three weeks ago, Hamas murdered more than 1,400 Israelis, which is more victims per their population than the militant Islamist organization al-Qaeda murdered on 9/11/2001 in the USA. And only 14 countries, including ours, stood up against the unprecedented terrorist attack committed by Hamas terrorists, clearly and comprehensible! “I am ashamed of the UN. In my opinion – the Czech Republic has nothing to expect in an organization that supports terrorists and does not respect the basic right to self-defense. Let’s get out.” The UNGA resolution approved on Friday calls for an “immediate, durable and sustained humanitarian truce leading to a cessation of hostilities.” The resolution did not include a condemnation of Hamas’s attack on Israel or a mention of Hamas in a line calling for the release of the hostages. The resolution was...

by Prague Morning Oct 29, 2023

Fiala: Czech Republic is Ready to Provide Support to Israel

Prime Minister Petr Fiala, during his visit to Israel, announced the Czech Republic’s readiness to offer support to Israel, thanks to its robust defense industry. Israel expressed interest in this assistance, although specific details were not disclosed. Fiala emphasized the long-standing historical and current support that Israel has received from the Czech Republic. Following a meeting with individuals affected by the recent attack by the Palestinian radical movement Hamas, Fiala expressed the Czech Republic’s alignment with the situation. Discussions with Israeli Prime Minister Benjamin Netanyahu included plans for concrete forms of assistance, which may utilize the Czech Republic’s strong defense industry. While Israel expressed interest, the details were not provided. Hamas launched a significant attack from the Gaza Strip into southern Israel on October 7, leading to casualties, and the situation escalated with retaliatory actions. Fiala noted the impact of these events on people he encountered, emphasizing the brutality and the values Israel is defending. The visit was intended to express support for Israel, and Fiala aimed to secure unequivocal support from the European Union for Israel’s right to self-defense and to promote stability in the Middle East.

by Prague Morning Oct 25, 2023

Minister of Interior: No Evidence of Muslim Radicalisation in Czechia

There is currently no evidence of radicalisation of the Muslim community in the Czech Republic, Czech Interior Minister Vít Rakušan (STAN) said on Sunday in light of increasing terrorism-related incidents across the EU. “At this point, we have no indication that there is radicalisation in the Muslim community in the Czech Republic,” Rakusan told Czech Television on Sunday. He also pointed out that the Muslim community in the country is not significant, and events in support of Palestine organised in Czechia were not primarily Muslim events, unlike those in Berlin and Paris. Sociologists estimate that roughly 20,000 Muslims live in the Czech Republic. The minister said police extremism experts supervise the pro-Palestinian events. Rakušan also stressed that sharing terrorist content is unacceptable in the Czech Republic, adding that no statement at the demonstrations explicitly supported Hamas. All pro-Palestine demonstrations in the Czech Republic have so far been peaceful. “We will not allow terrorism to be supported in any way in the Czech Republic, we will intervene at that moment,” said Rakušan. According to the minister, national security forces are still assessing the situation, and the state is ready to raise the terror risk level if necessary. He added that he...

by Prague Morning Oct 24, 2023

Two-Day International Crimean Platform Summit Starts in Prague

Today, on 24 October, the second parliamentary summit of the International Crimean Platform will take place in Prague. The purpose of the platform is to reaffirm international support for Ukraine and draw the world’s attention to the situation on the Crimean peninsula, which was annexed by Russia in violation of international law in 2014. The summit will be opened by the heads of both chambers of the Czech parliament – the House of Representatives and the Senate – and the Speaker of the Verkhovna Rada of Ukraine, after which President of Ukraine Zelenskyy will address the assembly in a video address. The delegates will also meet with Czech President Petr Pavel and Prime Minister Petr Fiala. “It is impossible to try to occupy the territory by aggression,” said the Speaker of the House of Representatives of the Republic of Moldova, Pekarova Adamova, on the eve of the summit. She noted that a resolution would be adopted during the meeting, which would “unequivocally condemn Russia’s aggression against Ukraine and the occupation of Crimea”. According to the organizers, the summit is being attended by high-ranking representatives of parliaments from more than 40 countries, as well as international parliamentary assemblies and organizations. In...

by Prague Morning Oct 24, 2023

Future of Western Civilisation is at Stake in Ukraine and Israel, Said Czech PM

Czech Prime Minister Petr Fiala said at the SH!FTS conference that the future of Western civilisation and its basic values, such as respect for human life and respect for civilians, are at stake in Ukraine and Israel. Fiala said that the nature of the conflict in Israel and the war in Ukraine is different: Russia’s aggression against Ukraine is a brutal but conventional military clash, while the attack by the Palestinian Hamas movement on Israel is pure terrorism. However, Fiala noted, what they have in common is that Western civilisation is under attack and that both attacks will affect the international environment in the next decade. “Security crises force us to respond to them and to change under their pressure,” Fiala said. He added that Czechia must refuse to be careless and prepare for all threats as best as it can. “There is no prosperity without security,” he stressed. That is why it is necessary to support those who have been attacked by aggressors, Fiala said. He stated that the conflicts have also highlighted the importance of strengthening the resilience of the Czech Republic. The Prime Minister reiterated that Czechia is increasing defence spending, which will reach 2% of GDP...

by Prague Morning Oct 20, 2023

Government’s Austerity Package: Czechs to Pay More for Beer and Medicine

The Czech parliament’s lower house has approved dozens of measures proposed by the government designed to keep the ballooning budget deficit under control. Czech citizens are a step closer to paying more for beer and medicine while businesses will face higher corporate taxes. In the 200-seat house, 108 MPs from the ruling coalition voted in favour of the plan, while 86 opposition members were against. When the government introduced the package in May, Prime Minister Petr Fiala said the proposed cuts, tax increases and austerity measures are necessary because the pace of the debt rise is “threatening.” Fiala said Friday the measures should reduce the budget deficit by 97 billion Czech crowns next year and by 150 billion in 2025. As a result, the deficit of 3.5% of the GDP expected for this year should drop to 1.8% next year and to 1.2% in 2025. The package still needs approval from the upper house, the Senate, where the coalition government has a majority, and presidential approval before becoming effective next year. Rising beer tax Corporation tax will go up by two points to 21% while property tax for individuals will be also increased, as well the tax on alcohol, tobacco...

by Prague Morning Oct 14, 2023

Czech Populists Would Win Elections if Held Now: Poll

The Czech opposition ANO party of former Prime Minister Andrej Babiš would win the Czech general election with 33.5% of the vote if elections were held now, according to a new opinion poll. The current Kantar election model for Czech Television also shows that the Pirates (Greens/EFA), STAN and TOP 09 (EPP) would still make it into the Czech Chamber of Deputies. At the same time, the Christian democrats (KDU-ČSL, EPP) would not pass the 5% threshold. By a wide margin, the currently governing ODS (ECR) would get 12%, with its support falling by 5% since the spring of 2023. The far-right party of Freedom and Direct Democracy (ID) would finish third with 9.5% of the vote. The current Czech government was formed in 2021, consisting of five parties – ODS, KDU-ČSL, TOP 09, Pirates and STAN. All the parties are significantly lagging behind the populist ANO party. The most noticeable outflow is from ODS towards ANO or Freedom and Direct Democracy. “The most frequently mentioned reasons for the shift are incompetence, inconceptiveness, chaotic, failure to fulfil promises, but there are also economic reasons such as high inflation, falling real wages and related reasons such as inaction, poor communication,” the...

by Prague Morning Oct 12, 2023

Czechia Supports Israel’s Right to Self-Defence, Said Czech President Petr Pavel

Israel has the right to defend itself against Hamas attacks, according to various Czech politicians, with some calling for an end to EU funding for Palestine. “The rocket attacks and the infiltration of Hamas commandos into Israel will block any efforts for a peaceful solution to the Palestinian-Israeli conflict for a long time. This aggressive action will inevitably provoke a harsh and justified reaction from Israel, which will bring many casualties,” Czech President Petr Pavel commented on the situation, adding that the way to settle the problem is through the negotiating table with “a great deal of goodwill.” Foreign Minister Jan Lipavský (Pirates) spoke with his Israeli counterpart over the weekend, where he “told him that the Czech Republic fully stands behind Israel and its right to self-defence. We also reiterated this position within the European Union,” Lipavský said. MEP Jan Zahradil, a member of the ruling ODS (ECR) party, called for a reduction in European support for the Palestinians. “Our group (ECR) will push for this in the European Parliament. This concept needs to be thoroughly examined and reconsidered. It is completely unacceptable to spread hatred towards Israel with European money,” he said on the social network X. EU...

by Prague Morning Oct 09, 2023

Czech Unions Demand Up to 10% Wage Growth as Inflation Slows

Czech trade unions will demand salary increases between 8% and 10% next year to compensate workers for the impact of high inflation, the head of the country’s biggest labor union said. Households in the central European country are reeling from the worst cost-of-living crisis in three decades that caused a deep drop in real income. Consumer price growth has been easing from a peak of 18% a year ago, with the central bank predicting it to slow toward the 2% target in early 2024. “Inflation is causing the biggest problems that we have,” Josef Stredula, the chairman of the Confederation of Trade Unions, said in a debate on public TV on Sunday. “Purchasing power is declining.” Central bankers in Prague are closely watching wage trends as a key factor for their monetary-policy deliberations. The bank last month began discussing a plan for lowering borrowing costs, but it listed the country’s tight labor market — the Czech jobless rate is one of the lowest in the European Union — among inflation risks. The central bank forecasts average inflation at 2.1% next year and predicts nominal wage growth of around 8%.

by Prague Morning Oct 08, 2023

Czechia ‘Unequivocally’ Condemns Hamas Attack on Israel

The Czech president and the head of government “unequivocally condemn” a surprise attack by Palestinian Islamist group Hamas on Israel on Saturday. “I condemn the terrorist attacks on Israel,” Czech Prime Minister Petr Fiala said on X, formerly known as Twitter. “My thoughts are with the innocent victims of the violence and I wish our friends in Israel the swiftest possible handling of the situation and the fulfilment of their ambitions to live in peace and security. The Czech Republic has always stood and will stand fully with Israel,” he added. “We follow with anguish the news coming from #Israel. We unequivocally condemn the attacks by Hamas. This horrific violence must stop immediately. Terrorism and violence solve nothing. The EU expresses its solidarity with Israel in these difficult moments,” EU foreign policy chief Josep Borrell said. What happened Hamas launched the biggest attack on Israel in years on Saturday in a surprise assault that combined gunmen crossing into several Israeli towns with a heavy barrage of rockets fired from the Gaza Strip. As warning sirens wailed across southern and central Israel, including in Jerusalem, Israel’s military said it was on a war footing and the defense minister said the Iran-backed...

by Prague Morning Oct 07, 2023

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