Politics & Economics

Czech Inflation Reaches 17.5 Percent

Inflation in Czechia reached 17.5 percent year-on-year in July, up from 17.2 percent the previous month, according to official data published on Wednesday. The price of foodstuffs and energy increased the most. Compared to June, prices rose 1.3 percent, which was the mildest month-on-month increase since February. Prices of electricity and natural gas rose by 33.6 percent and 59.8 percent, respectively. In the housing section, prices of electricity rose by about a third, natural gas by 59.8 percent and solid fuels by 41.1 percent. The annual growth of fuel and oil prices was lower than in June, rising by 43.6 percent. Prices of rents rose by almost five percent, water by 5.3 percent and sewage by 6.4 percent. Heat and hot water rose by almost a fifth. The Czech economy is facing a combination of exceptionally strong inflation pressures causing escalating broad-based price growth. Inflation in the domestic economy continues to hit new long-term highs in rapid succession. Consumer prices are being pushed up by rising costs, reflecting domestic and foreign factors, including higher energy prices, and growth in the margins of domestic producers, retailers and service providers amid a still solid income situation of households. Inflation will peak at...

by Prague Morning Aug 10, 2022

Remote Working: Why It’s Still Not Fully Accepted Among Czech Employers

Two years ago, the COVID-19 health crisis triggered a surge in remote working as most countries had to follow strict safety measures to keep businesses going. But now that most of these measures have lifted and life has gone back to “normal,” many companies are still transitioning their once-in-office roles to either entirely or partially remote ones. A recent study from employment site Indeed found that the number of global job listings with a remote component has soared since the beginning of the pandemic, nearly tripling from an average of just 2.5 per cent in January 2020 to almost 7.5 per cent in September 2021. Data scientists at careers site Ladders believe remote work is here to stay, with a full quarter of all professional jobs to be available remotely by the end of the year. “This change in working arrangements is impossible to overhype. As big as it is, it’s even bigger than people think,” said Ladders CEO Marc Cenedella. “Hiring practices typically move at a glacial pace, but the pandemic turned up the heat so we’re seeing a rapid flood of change in this space. It’s really rather amazing”. But while much of the world seems to be rapidly embracing...

by Prague Morning Aug 07, 2022

Czech’s Government Promised Up to CZK 16,000 for Gas and Electricity, Unlikely to Deliver

President Miloš Zeman signed the law introducing the so-called Savings Tariff, which is supposed to help households reduce their bills for electricity, gas and heat. This year, Czechs will probably receive a subsidy for expensive energy costs of only around CZK 2,000. The Minister of Industry, Jozef Síkela, initially spoke of up to CZK 16,000 for gas and electricity. It appears as though the current administration will not be able to follow through on this, however… The energy-saving tariff will take the form of a subsidy from the state budget intended for energy suppliers, who will then reduce payments to households by this subsidy. Following the imminent adoption of the law, the government will regulate the details, such as the amount of the allowance. The government could set aside 30.6 billion crowns for the cost-saving tariff. Of this amount, 3.6 billion crowns will be distributed among households with domestic boilers, which were not originally included in the support program. Gas and electricity traders are supposed to reduce bills or deposits by the received subsidy. They will have to indicate this on the bill. The support will not apply to weekend properties and recharging electric cars. Owners’ associations and cooperatives will...

by Prague Morning Aug 05, 2022

Bijan Sabet Nominated as US Ambassador to Czechia

On Wednesday, US President Joe Biden appointed US investor Bijan Sabet as Ambassador to the Czech Republic. It was announced by the White House in a statement, along with other names of candidates for ambassadorships in other countries. The nomination still needs to be approved by the US Senate. The last American Ambassador in Prague was Stephen King, at the end of 2020 he announced that he would relinquish this position when the new President Biden takes office. Since then, the post of US Ambassador to Prague has been vacant. King was the ninth U.S. ambassador to the Czech Republic. He took over the office in December 2017 from lawyer Andrew Schapiro, with whom President Miloš Zeman did not have a good relationship. “We are pleased that President Biden has announced his intention to appoint Bijan Sabet as Ambassador to the Czech Republic. This demonstrates the strong friendship between the United States and the Czech Republic. The nomination must now be approved by the United States Senate,” said the US Embassy in Prague on Twitter. Sabet, 53, is co-founder and partner of Spark Capital since 2005, which deals with venture capital. He directed his investments in Internet networks. He was...

by Prague Morning Aug 04, 2022

Czechs Want Energy Crisis Solved Before Focusing on Ukraine, Survey Shows

As Czechia completes the first month of its EU presidency, a survey by the STEM agency showed that Czechs would prefer the government use this role to solve the energy crisis over worrying too much about the post-war recovery of Ukraine. The most important task of the Czech presidency is considered by 79 percent of those surveyed to be “solving the social impacts of the energy crisis.” This topic has a universal response across society, even among opponents of European integration. “It is based on domestic price developments,” explained sociologist Nikola Hořejš. “The Czechs hope that Europe will cover their backs in this situation. According to our data, four-fifths of the population must start saving significantly, which means even the better-off,” he added. Regarding energy security, 57 percent of the public wants the government to speed up the transition to green energy. Proposals to make this possible will be on the agenda of the Czech presidency in the coming months. “Renewable sources are now an obvious alternative to fossil fuels not only because of the climate crisis but also because they increase the energy self-sufficiency of the Czech Republic,” said Helena Truhlá, chief analyst of Czech interests in the EU project. “82 percent of Czechs now want energy self-sufficiency...

by Prague Morning Aug 02, 2022

Row Over Babiš’ Conflicts of Interest Set to Spice Up Czech Presidential Race

Czech Minister of Agriculture Zdenek Nekula has told Czech Radio that former premier Andrej Babis’ Agrofert holding will have to return agricultural subsidies worth of up to CZK4.5 billion, and he indicated that more aid could be demanded back by other ministries. Nekula’s comments follow the European Commission officially concluding the probe into the billionaire’s conflicts of interest, sparked already by Babis’ first ministerial stint in the cabinet of Social Democratic PM Bohuslav Sobotka (2014-2017) and then his own 2017-21 government. During his time in government Babis’ agro-chemicals holding continued to claim subsidies for projects, despite the fact that, according to the EU, he still exercised effective control of the holding and was therefore in a conflict of interest. The EU has refused to reimburse the Czech government for money paid out to Babis while he was in a conflict of interest, leaving it to the government to recoup the misspent subsidies from Agrofert, the largest private recipient of subsidies in the country. Nekula expects Agrofert to object to his ministry’s move and braces for legal battles ahead. Agrofert is likely to build its case around the looser standards of ownership and consequently conflict of interests under the then-existing Czech legislation. Current opposition leader Babis and his...

by Prague Morning Aug 01, 2022

Prague prices Water, Gas and Waste Collection

“Gas Bills Can Exceed CZK 100,000 per Year,” Say Czech Economists

Energy suppliers in the Czech Republic have already raised prices several times this year. Families living in houses that heat water, heat and cook with gas will feel it the most. According to experts, a household consisting of four people will have to prepare approximately 56,000 crowns more than they were used to just for gas bills. The worst situation is for families with children who live in a house and heat with gas. In a block of flats without gas, a family of four will pay an extra 11,000 crowns for electricity this year. However, if they live in a house and heats with gas, electricity costs will rise by 22,000 crowns this year, and even by 28,000 for gas. However, it is not only households with children that are at risk. “The most vulnerable category of customers are typically pensioners who live in a house heated by gas and who have not invested in that house for a long time,” said Karel Polanecký, an energy expert from Duha. According to experts, energy prices have still not reached their ceiling. For example, if a family of four uses gas for heating and water heating in their home and paid...

by Prague Morning Jul 27, 2022

Czech Republic Struggles to Replace the Ukrainian Workers

Construction sites, factory assembly lines and warehouses across central Europe are scrambling to fill vacancies after tens of thousands of Ukrainian men left their blue-collar jobs to return home after Russia invaded their country. Ukrainian workers had flocked to central Europe in the past decade – drawn by higher wages and aided by an easing of visa requirements – filling jobs that weren’t highly paid enough for local workers in construction, the automotive sector, and heavy industry. Many of these workers have returned home to help the war effort since Russia invaded on 24 February, abruptly worsening labour shortages in some of Europe’s most industrialized economies. Before the Russian invasion, Ukrainians were the largest group of foreign workers in central Europe. The Czech Republic hosted Ukrainian workforce of around 200,000 respectively, according to industry trade groups. “The loss of Ukrainian workers has deepened the problems companies are facing,” Radek Spicar, vice president of the Czech Federation of Industry, told Reuters. “Companies say they can’t cover all the demand from business partners: they deliver with delays and pay penalties.” Before the Russian invasion, Germany-based recruiter Hofmann Personal had more than 1,000 Ukrainian candidates due to arrive in the Czech Republic between...

by Prague Morning Jul 26, 2022

Czech Gas Storage Hits 80% of Capacity Ahead of Winter Season

The Czech Republic’s gas stores are 80% full, Prime Minister Petr Fiala said on Monday, as the country and other European Union member states continue to boost storage to protect against risks of a halt to Russian supplies. The EU aims to have gas storage facilities across the bloc 80% full by Nov. 1, but its efforts have been hit by temporary outages or reduced capacity via Nord Stream 1, a major pipeline carrying Russian gas to Europe. Fiala said in a Twitter post that Czech gas storage levels were at a record level. “We are working to be as well prepared as possible for the winter,” he said. Deliveries of Russian gas via the Nord Stream 1 pipeline have now been limited to 20 percent. The annual gas consumption in the Czech Republic is about 9.4 billion cubic meters and the country gets about 98 per cent of its gas from Russia. The Czech Republic was nearly fully dependent on Russia for gas before Moscow’s invasion of Ukraine in February pushed it to seek alternative supplies. Industry Minister Jozef Sikela said last week the country had secured 3 billion cubic meters of annual gas capacity – roughly a third...

by Prague Morning Jul 26, 2022

Restaurant Lunch Prices are Skyrocketing. Czechs are Looking for Ways to Save Money

No one who’s keen on eating out has missed the fact that they have to dig deeper into their pockets when visiting the restaurant. However, the willingness to pay more and more for lunch has begun to decline. Since the beginning of this year, the price of lunch has been rising by one or two crowns every month. The costs of running restaurants are rising and their owners cannot afford to bear them all. The margin in the catering sector is very sensitive to any cuts. The average price of lunch in June reached CZK 160.20, 10.1 per cent more than a year ago. And it seems that this is an amount that for many Czechs represents the ceiling of financial possibilities. Data from the Czech Statistical Office and the Ticket Restaurant Card Index show that prices in restaurants increased by 23.5 percent year-on-year in June. At the same time, however, the gap between the amount spent and how much food costs is increasing. Thus, in May, restaurant prices rose 11.6 percent faster than spending; in June, the gap was already 13.4 percent. Which means only one thing – guests are choosing cheaper items from the menus, denying themselves salads...

by Prague Morning Jul 25, 2022

European Commission Closes Ex-PM Babiš Unlawful Subsidy Case

The European Commission found conflicts of interest in the distribution of EU funds, and as a result, Czechia will have these amounts deducted from future subsidies. The European Commission investigated the allocation of subsidies to non-eligible entities, including some linked to former Prime Minister Andrej Babiš, Regional Development Minister Ivan Bartos from the Pirate party, said on Thursday, according to the Czech News Agency. In an investigation spanning some three years, the Commission found several unlawful examples, including disbursement to a bakery from Agrofert, which Babis transferred to trust funds to meet the Czech conflict of interest law. The firm was given a subsidy of €4 million for constructing a bread assembly line that did not meet the innovation criteria. Czech ministries will now have to enforce the return of such subsidies from the recipients, which could result in litigation. Bartos said he expected the ministries to enforce the return of such subsidies, which may lead to court proceedings. Rather than returning the money to the Commission, Czechia will get less in the next period when other subsides are approved, as those allotted unlawfully will be deducted from their volume, Bartos said. “It will be up to our institutions to gain...

by Prague Morning Jul 22, 2022

Czech, Austrian Foreign Ministers Visit Irpin

The ministers of foreign affairs of Austria and the Czech Republic, Alexander Schallenberg and Jan Lipavsky, have visited Irpin, city mayor Oleksandr Markushyn has said. The visit is to signal continuing EU support for Ukraine in the war waged by Russia and ascertain the country’s needs at the present time. “We are especially honored to welcome such guests, since Irpin receives a noticeable assistance from Austria and the Czech Republic. Thousands of Irpin residents have found safe shelter in these countries. In addition, Austria has started providing us with its support for the recovery of the city,” he said on the Telegram channel. On behalf of the entire community, the mayor thanked both ministers for their clear position and comprehensive support for Ukraine and its people. Markushyn said on July 18 that 70-75% of Irpin’s residents had already returned to the city. The Czech Foreign Minister also paid a visit to the town of Irpin and the Hostomel air base, which were the scenes of fierce fighting at the beginning of the Russian invasion of Ukraine. Thousands of Ukrainians lose automatic right to health insurance in Czechia Thousands of Ukrainians in the Czech Republic will lose the automatic right to...

by Prague Morning Jul 20, 2022

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