Politics & Economics

Czech Republic’s Electricity Price Cap Explained

The Czech government, led by Prime Minister Petr Fiala, presented a plan to relieve citizens from unprecedentedly high energy prices, with ministers finally moving to put a cap on the country’s electricity and gas prices. At the same time, proposals for price caps also came from Brussels. Jakub Kajzler, the advisor to the prime minister, spoke in an interview for Echo24 about how the Czech and European paths are related, who will not be spared by taxation, and how the Czech consumer will benefit from this. Answering the question as to why the EU price cap being lower than the one approved by the Czech government, Kajzler said that the EU price cap is a reference figure that allows governments to tax revenues from sales for prices higher than €180 per megawatt-hour. The number, however, does not say anything about what the electricity price for the consumers should be. He indicated that the European Commission is only saying that governments can use the money from the taxed income of some producers to compensate the final consumers, i.e., citizens and entrepreneurs. The Czech and European price caps are thus not comparable. A large part of the electricity that is currently being supplied was already...

by Prague Morning Sep 16, 2022

Czech Government Plans CZK 60 Billion in Aid for Companies

The Czech government plans to provide 60 billion crowns in aid to companies hit by soaring energy prices, Prime Minister Petr Fiala said on Wednesday. The Czech Republic, like other European Union nations, is grappling with soaring energy prices following a sharp reduction in natural gas flows from Russia amid Western sanctions on Moscow over its invasion of Ukraine. The package adds to a cap on power prices for households and the public sector announced on Monday. The Czech government agreed larger companies would draw from a 30 billion crown package, and a further 30 billion should be made available for smaller companies within a framework proposed by the European Commission, Fiala told reporters. Aid schemes in EU countries need to be aligned with a bloc-wide agreement expected to be based on a proposal by the Commission, which is seeking more than $140 billion from energy firms to help shield households and businesses from soaring prices. Finance Minister Zbynek Stanjura said the government would, on top of EU plans for a windfall levy on companies in the fossil fuels sector, also aim for a windfall tax on some banks, as well as electricity producers and traders. “The firms will receive...

by Prague Morning Sep 14, 2022

Former Czech PM Babiš Stands Trial Accused of EU Subsidy Fraud

Former Czech Prime Minister Andrej Babis has gone on trial over fraud accusations connected to a two million euro European Union subsidy that has marred his political career for the past five years. Prosecutors allege that Babis, owner of a chemicals, farming, food and media empire, now held in a trust, illegally tapped the subsidy to build a conference centre near Prague before he formed his anti-establishment ANO party in 2011. Babis has denied any wrongdoing and has repeatedly said the case against him is political. “I am glad all will see this, my arguments against this untrue charge,” Babis said as he entered the court building on Monday, according to Czech Television footage. “It was of course politically motivated criminal investigation.” Potential presidential hopeful Babis, 68, is a potential presidential hopeful in an election early next year and still heads parliament’s biggest party even though he sits in opposition after five parties combined in an election last year to remove him from government. Babis may face a jail term if found guilty, although prosecutors asked for a suspended sentence and a fine. The trial is expected to last into at least mid-October, and any verdict is subject to appeals. The...

by Prague Morning Sep 13, 2022

PM Fiala to Attend Queen Elizabeth’s Funeral

Prime Minister Petr Fiala is set to attend late Queen Elizabeth’s funeral, president, Miloš Zeman told radio Frekvence 1 on Sunday. The funeral will be held on September 19, according to Reuters. President Zeman said that he had been forbidden by doctors to fly due to medical reasons and that he therefore asked the prime minister to attend instead. Queen Elizabeth, Britain’s longest-reigning monarch, and the nation’s figurehead for seven decades, died at her home in Scotland aged 96 on Thursday. The Queen’s state funeral will take place at Westminster Abbey in central London, after which the Queen’s coffin will be taken to Windsor for a committal. Details of who will attend as well as the order of service are expected next week. Her funeral will be a bank holiday, King Charles has announced. It is thought there are plans for the Queen’s coffin to process on a gun carriage to the abbey. The military will be expected to line the streets and also join the procession. Following the tradition of the funeral of Diana, Princess of Wales, and the Duke of Edinburgh, it is expected the family will follow behind the coffin. Heads of state, prime ministers and presidents, European...

by Prague Morning Sep 12, 2022

Czech Finance Minister Plans Power Price Limits for Industry

The Czech government will look at putting a limit on industrial electricity bills at the same time as it tries to help households and state institutions get through Europe’s energy crisis, Finance Minister Zbynek Stanjura said on Sunday. The centre-right government is readying more measures to go alongside European Union plans to ease the burden of soaring energy prices after an emergency meeting of the bloc’s energy ministers on Friday. The Czech government is due to meet on Monday. “I am for a bold solution,” Stanjura said on Czech Television’s Sunday debate show, referring to guaranteeing electricity prices for industry. He backed the move “even with the possible risk that it will be assessed that there was some unauthorized support,” he added, in a possible reference to EU competition and aid rules. This step could be in place by the end of the year and would last up to two years, he told the show. Stanjura told daily Hospodarske Noviny last week that national plans to ease the burden of soaring energy costs, including some form of price cap, could cost up to 130 billion crowns. The Czechs have started implementing a reduced electricity tariff for households as part of...

by Prague Morning Sep 11, 2022

The Visit of the US Defense Secretary in Prague

Secretary of Defense Lloyd J. Austin III visited the Czech Republic, September 9, where he met with Czech Minister of Defense Jana Cernochova, Prime Minister Petr Fiala, and President Milos Zeman. During the meetings, he discussed Czech Republic’s defense modernization work to enhance interoperability with NATO, opportunities for further defense cooperation, and the importance of continuing to provide support to Ukraine. He began his trip to Prague on Friday with a visit to the Church of Saints Cyril and Methodius, where seven Czechoslovak paratroopers died in June 1942 in a gun battle with German troops after having assassinated high-ranking Nazi Reinhard Heydrich. The Secretary applauded the Czech Republic for its leadership in Europe and in the NATO Alliance, for ratifying the accession of Finland and Sweden into NATO, and for its extraordinary support to Ukraine as it defends against Russia’s unprovoked and unjustified war. Ms. Černochová described the United States as Czechia’s most important ally. The two countries want to speed up negotiations on a defence cooperation agreement, with the next meeting scheduled to take place in two weeks’ time. Secretary Austin also met with U.S. Marines at U.S. Embassy Prague and several U.S service members participating in the Czech...

by Prague Morning Sep 10, 2022

From January, Refund of Energy Expenses for Remote Workers

From the new year, we will see some changes to facilitate smart working employees. Mainly it is meant to be a reimbursement of costs incurred by working from home: expenses for heating, electricity and water mainly. The minimum fee is CZK 2.80 per working hour. It is not part of the salary, so it is out of contribution payments. In addition, this amount will be decided year to year by the ministry by decree and is based on data provided by the Czech Statistical Office about the costs per adult in an average Czech family. In addition, the text requires employer and employee to make an agreement about the details of remote work: location from which work is performed, scope, time conditions (hours and on-call), way of communications, task assignment, and cost refund. Until the Covid-19 pandemic, smart working was seen as a company benefit; now it is guaranteed to workers in all EU countries by the Work-Life Balance (WLB) Directive. This is for workers to make it easier to take care of their children and loved ones. According to a recent survey conducted for Raiffeisenbank, about 29 percent of Czech employees have the option of working remotely, but only 18...

by Prague Morning Sep 06, 2022

Czech PM Blames Russian Propaganda For Mass Protests In Prague

Czech Prime Minister Petr Fiala is blaming pro-Russian forces for mass demonstrations this weekend that saw tens of thousands of people protest against the government, the European Union and NATO amid soaring energy prices and inflation. The “Czechia First” demonstration saw 70,000 people gather to protest the government in a development the Czech prime minister is blaming on elements influenced by Russian propaganda. “It is clear that Russian propaganda and disinformation campaigns repeatedly appear on our territory and that someone is simply succumbing to them,” Fiala said. Protesters, brought together by the Communist Party, the Freedom party, the Direct Democratic Party, and other groups labeled as “radical”–both far-left and far-right–called on the government to address soaring energy prices and the highest cost of living since the early 1990s for everything from housing to consumer goods. Protesters called for a new deal with Russia for gas supplies, just a day after Moscow said natural gas flows through Nord Stream 1 to Europe that had been cut off for maintenance would not be restored on Saturday as scheduled, and would be delayed indefinitely. Inflation has hit 17% and is marching towards 20% in the coming months, according to Fortune, citing the Czech central...

by Prague Morning Sep 06, 2022

Average Wage in Czechia Up to CZK 40,086

The average gross monthly salary in Czechia rose by 4.4 percent year-on-year in the second quarter of 2022 to CZK 40,086, according to the data released by the Czech Statistics Agency on Monday. In real terms, taking into account inflation, the real wage dropped by 9.8 percent in the same period. It is the third quarter in a row that it has been falling. Central Europe’s economies are bracing for a rough second half of the year, which could even mean a fall into recession for some, caused by double-digit inflation rates that are hitting consumer demand and taking away a key driver of the region’s post-pandemic recovery. With inflation in the Czech Republic averaging 15.8% in the second quarter, wages were down by real 9.8% from a year before. The nominal wage rose 4.4%. “It was clear that wage growth at such a pace would not be enough (to keep up with inflation),” Raiffeisen analysts said. The real wage drop was slightly deeper than a Reuters poll forecast of a 9.5% decline but less than a central bank forecast of a 13.1% fall. The central bank, which held interest rates unchanged last month but has not fully shut the...

by Prague Morning Sep 05, 2022

Czech Government Survives No-Confidence Vote Over Energy Prices

The Czech government survived a no-confidence vote on Friday after a marathon 22-hour debate in parliament amid opposition claims of inaction against soaring inflation and energy prices. The vote showed how Europe’s energy crisis is fuelling political instability as soaring power prices add to inflation, already at levels unseen in three decades. The centre-right, five-party coalition led by Prime Minister Petr Fiala has an eight-seat majority in the 200-seat lower chamber, easily denying two opposition parties the needed 101 majority required by in parliamentary votes. Lawmakers gathered on Thursday and debated the motion throughout the night before a vote at midday on Friday. “Prime Minister Fiala and his ministers are not able to run our country…. the energy crisis has completely got out of their hands,” opposition leader Andrej Babis told lawmakers. Former prime minister Babis, a billionaire who was defeated in an election last year, also accused the government of links to people being investigated for alleged corruption in a scandal that has forced the resignation of the head of the secret service. A loss of confidence would have been an embarrassment for the Czech government, which is leading the European Union’s rotating presidency as the bloc seeks to...

by Prague Morning Sep 03, 2022

Czechs Have Most Expensive Electricity in Europe Despite Exporting Huge Amounts of Power Abroad

This July, Czech households paid the highest price in Europe for electricity; and yet, something many Czechs see only as a cruel joke, the country remains among the largest exporters of electricity in the world. The July HEPI index (Household Energy Price Index), which compares the price of energy for households in individual European capitals, shows clearly what is occurring. People living in Prague pay the highest price for electricity in all of Europe, according to the purchasing power parity of the currency. This index includes member states and countries outside the EU, such as Switzerland, Norway, and Russia. According to the study, the people of Prague paid roughly 52 euro cents per kilowatt-hour in July. That is roughly twice as much as what residents of Bratislava pay and approximately three times more compared to the costs of residents of Budapest or Moscow. Prague’s residents also pay almost four times more than households in the Swiss capital of Bern and over four times as much as households in Oslo, Norway. Electricity prices in Prague are high even in absolute terms, without conversion, that is, according to the purchasing power parity of the currency. In this case, Prague residents pay the fourth-highest price in the EU, roughly 41 euro cents...

by Prague Morning Sep 02, 2022

EU Foreign Ministers Agree to Suspend Visa Facilitation Agreement

On 30 and 31 August 2022, Prague hosted an informal meeting of EU foreign ministers known as a Gymnich. The ministers primarily discussed two topics, namely the EU’s relations with Africa and the Russian aggression against Ukraine. The main outcome of the meeting was agreement among the Member States to suspend the visa facilitation agreement. The main topic of the meeting of foreign ministers was the Russian aggression against Ukraine and its consequences. The ministers agreed that they would remain united in their approach to the hostile behaviour of Russia, and that they would provide Ukraine with the necessary support. Specific parameters of future military assistance to Ukraine were also discussed, with the ministers also addressing possible steps to strengthen the European Peace Facility to better meet the needs of the Ukrainian army. The discussions also saw an important breakthrough in the visa policy in relation to Russia. The foreign ministers agreed to suspend the visa facilitation agreement that makes it significantly easier for Russian citizens to obtain Schengen visas. In terms of our relations with Russia, we cannot continue as before. We have made progress at the meeting of foreign ministers and want to fully suspend the agreement that...

by Prague Morning Sep 01, 2022

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