Politics & Economics

Czech Auto Industry Revving Up for E-Mobility Transition

“We have repeatedly said that the [EU’s climate] goals must be set in a way not to harm our industry,” Czech Prime Minister Andrej Babis grumbled recently in the presence of reporters. “It must be done reasonably, not based on ideology.” Babis’s complaint that the target is “extremely ambitious” is not surprising. While rarely coming up with his own ideas, the populist billionaire seldom misses a chance to claim to Czech voters he’s pushing Brussels for a better deal for their country and its less privileged economy. The transition to e-mobility is a particular issue. The auto sector is a lynchpin for the Czech economy, accounting for 26% of all industrial output and more than 9% of GDP. Not only does the EU’s Fit 55 plan demand a huge shift for a key industry, but it cuts to the very heart of the Czech economic model adopted when communism fell. Based on cheap labor it has long been exploited by foreign investors, and remains in play today in many sectors, including autos. Although the challenge is huge, in the face of the existential threat posed by the transition there’s no choice but to institute revolutionary change, industry figures insist. It’s not the carmakers...

by Prague Morning Sep 07, 2021

PM Babiš Calls for Expansion of Schengen Area to Include Western Balkan Nations

The enlargement of the European Union to include the countries of the Western Balkans is a complex process that will take a long time, but until then, Brussels should offer the region the prospect of membership in the Schengen Area, stated Czech Prime Minister Andrej Babiš at the Bled Strategic Forum in Slovenia. “Why aren’t we talking about Schengen? The enlargement of Schengen is much easier than the enlargement of the European Union,” said Babiš, who participated in the conference in a panel of leaders entitled “Future of Europe – To Stand and Withstand”. In his speech at the forum, the head of the Hungarian government, Prime Minister Viktor Orbán, also spoke in favor of Serbia’s accession to the EU, calling Serbia a key state. Members of the Schengen Area enjoy visa-free travel between member states. According to Babiš, the enlargement of the Schengen Area would significantly help to stop illegal migration. He also reiterated that in addition to the EU member states of Croatia, Bulgaria, and Romania, that Serbia should also be admitted to the Schengen Area. However, Babiš is not in general optimistic about the Schengen Area as, last week, he stated it is not working. When asked if he...

by Prague Morning Sep 05, 2021

Seeking Re-Election, Czech PM Pledges to Keep Migrants, Brussels at Bay

Czech Prime Minister Andrej Babis launched his populist ANO party’s campaign for re-election on Thursday vowing to keep out migrants and prevent ceding national powers to Brussels. The Czech Republic took in almost no migrants when a wave of asylum seekers swept the continent in 2015, and echoing Hungary’s leader Viktor Orban, Babis has continued to resist accepting migrants as an important part of his message to the public. “This is the last chance to protect our national interests, living standards, our culture,” Babis said, launching the campaign for the Oct. 8-9 parliamentary election on his 67th birthday in the northern city of Usti nad Labem. He said the opposition would hand over national sovereignty to Brussels and “break up” the Visegrad Group alliance with Slovakia, Hungary and Poland, which Babis has praised despite Hungary’s and Poland’s frequent standoffs with European institutions. “As long as I am prime minister, we will not accept a single illegal migrant,” he said, recalling his resistance to past EU plans to distribute asylum seekers across the bloc. ANO is leading in opinion polls, but not by enough to win an outright majority, raising the possibility of lengthy post-election haggling over a new administration. A...

by Prague Morning Sep 02, 2021

Czech Economy Grew by 8.2% Year-On-Year

According to a revised estimate by the Czech Statistical Office (ČSÚ), the Czech economy grew by 8.2 percent year-on-year or by 1-percentage point quarter-on-quarter in the second quarter of this year. Economists originally estimated that the Czech gross domestic product would grow by 7.8 percent year-on-year in the second quarter. In contrast to the first estimate from the end of July, the new data show the Czech economy in a better light. The preliminary projection estimated a quarter-on-quarter increase of 0.6 percent. The positive quarter-on-quarter development of the GDP was mainly prompted by growing household consumption. “The easing of anti-epidemic measures has allowed households to spend more on services and long-lasting goods, and their consumer spending has thus contributed to GDP growth of 2.4 percentage points. However, the lower dynamics of export growth and growing imports led to a negative contribution of foreign demand of 2.2 percentage points,” said Vladimír Kermiet from the Czech Statistical Office. Gross domestic product returned to year-on-year growth after a year and a quarter. “Some experts expected up to 10 percent growth, but the reality is less positive. Even though it is still the most significant year-on-year growth of the economy in the whole of...

by Prague Morning Sep 02, 2021

iROZHLAS.cz: Babis’ ANO Email Hosted By Agrofert

More than 600 e-mail boxes of the government ANO party, including its management, are operated by the Agrofert holding, according to iROZHLAS.cz. The movement’s email runs on the same network as dozens of other e-mail servers of companies from the holding, such as Precheza, Penama, Deza and Fatra. In 2017, the chairman of the movement and Prime Minister Andrej Babiš invested the holding in his trust funds and claims that he no longer has anything to do with the company. ANO spokesman Martin Vodička said that the movement pays for the service of Agrofert. Both the chairman of the movement, Andrej Babiš, and hundreds of other people associated with ANO use the e-mail box operated by Agrofert. “At the moment, we have set up 605 e-mail boxes, which are used by the presidency, committee, regional chairmen and managers, employees and some other collaborators,” spokesman for the ANO Martin Vodička specified for Radiožurnál. According to Vodička, the movement orders the service from Agrofert on the basis of an IT support contract and pays for it monthly. “So this is a standard business relationship and we had no reason to change the service provider, which has been working properly for a long time,”...

by Prague Morning Sep 01, 2021

EU to Halt Some Subsidies to Czech Republic Over Conflicts of Interest

The European Commission told the Czech Republic on Monday it would halt the payment of some EU subsidies until the country tightens its laws to guard against conflicts of interest. The EU executive concluded in an audit released in April that Prime Minister Andrej Babis was in a conflict of interest as final owner of a business empire, mainly under the Agrofert group of companies, that receives EU funding. Babis has repeatedly insisted he has not broken any laws, having moved his business holdings into two trust funds. But on Monday, the Commission said it would not reimburse any spending on EU projects claimed by companies held by trust funds for now. “As long as all the recommendations formulated in the (audit) report are not carried out, we are advising the Czech authorities not to declare expenses that are due for companies whose beneficial owners are trust funds. It’s a warning,” the Commission said. While spending by Agrofert is already not being reimbursed, the Commission feels the issue might be wider, an EU official said. “There is real concern that the risks that surfaced around Agrofert may be replicated with other companies,” the official said. The Commission also asked Czech...

by Prague Morning Aug 30, 2021

Babiš: “Czech Republic Will Not Negotiate With Taliban”

“The Czech Republic will certainly not negotiate with the Taliban.” This was stated by Prime Minister Andrej Babiš in an interview with Mladá fronta DNES. According to him, the approach towards a Taliban-led Afghanistan is more a question for the European Council or for the North Atlantic Treaty Organization (NATO). If the radical Islamist Taliban movement that ruled Afghanistan in mid-August can be trusted, time will tell, according to Babiš. “The Czech Republic will certainly not negotiate with the Taliban. The mission is over for us, we saved the people we needed to save,” Babiš told MfD. “The Taliban are still looking and wanting to show the world that there is no problem in Afghanistan when Allied troops have left. And that there is no reason for Afghans to leave the country. Only time will tell whether we can trust them or not,” Babiš added. One week ago, in response to developments in Afghanistan, Foreign Minister Jakub Kulhánek (CSSD) said that the Czechia would have to accept the reality in Afghanistan after the fall of Kabul and seek more active cooperation with countries that have contacts with the Taliban. Since mid-August, when the Taliban took control of Afghanistan in a...

by Prague Morning Aug 27, 2021

Pirates And Mayors Losing Support Among Voters

In the spring, Pirates and Mayors were the favorites of the election, and Ivan Bartoš was asked if he was ready for the role of prime minister. However, since the start of the campaign in May, the coalition has garnered criticism for the trespasses, and voters began to leave it before the summer. The decline in preferences continues until now. Dissatisfaction is also heard from within the Pirates, according to them the campaign is very defensive. Experts claim that the two parties in the coalition have lost their own identities. According to surveys, Pirates and Mayors have been experiencing a decline in voter support since the spring, when they successfully attacked the 30% threshold. Current data from the Median agency give them about twenty percent preferences, ie third place – behind the ANO movement and the Together coalition. According to the STEM agency, only 18.7 percent of Czechs would vote for them in August. A vicious fightback by Prime Minister Andrej Babis has dented PaS’s support. The billionaire premier has been busy warning the country’s older and more conservative voters that the progressive-liberal Pirates are actually an authoritarian neo-Marxist mob hellbent on forcing them to become vegan and share their homes with migrants. “We cannot let them...

by Prague Morning Aug 25, 2021

“Russia Isn’t The Enemy; Trump and Biden Are ‘Timid’,” Says Zeman

According to Czech President Miloš Zeman, NATO needs fundamental reform. In connection with what is happening in Afghanistan, he stated that NATO should cease to be a service organization of the United States and should start to feature equality among its members. According to him, NATO should also define its enemy, which is international terrorism, not Russia, for example. The departure from Afghanistan, accompanied by the fact that the Taliban movement has practically taken over power in Afghanistan, is the fault of US President Donald Trump and his successor Joe Biden. According to him, both are “timid”. “In any case, if it was an uncoordinated American action, then one has to ask whether NATO needs reform,” he said. According to Zeman, NATO should cease to be a “US service organization”. At recent summits, he said the leaders of other countries were mostly silent about the US plans to leave Afghanistan. “We need NATO’s collective leadership, a certain equality of member countries. Not a situation where if a US president calls, everyone else will obey,” he said. He added that he agreed with the opinion of French President Emmanuel Macron that Russia is not an enemy of NATO. According to Zeman,...

by Prague Morning Aug 24, 2021

Czech Politicians Unanimously Refuse to Recognize Taliban Government

There is unanimous agreement among Czech politicians, including President Miloš Zeman, that there is no way that the Czech Republic would recognize the Taliban government. Around the world, governments are mostly waiting for how the future government deals with fundamental human rights, especially concerning women and girls. “There is no way we would consider that,” said Jiří Ovčáček, the spokesperson of President Miloš Zeman, when asked whether Czechia should recognize the new Afghan government created by the Taliban. Representatives of parliamentary parties view the issue in the same way. “Definitely not. The Taliban is a terrorist organization. I do not see a single reason why the Czech Republic should recognize its government. On the contrary, we must be well prepared for what its government will do so that we are not surprised,” replied the chairman of Civic Democrats (ODS), Petr Fiala, to the same question. The chairman of Christian Democrats (KDU-ČSL), Marian Jurečka, reacted similarly, saying there was no reason to recognize the Taliban government until it was clear how it would conduct itself in Afghanistan. Likewise, “guarantees of human rights with an emphasis on the status of women” would have to be clear, according to Jurečka. He also mentioned...

by Prague Morning Aug 21, 2021

Prague’s Hotels are Still Performing Low, Yet Investors’ Interest in Them Continues

The occupancy level in Prague’s hotels was just 10 per cent during the first six months of this year, with revenue remaining far below the average of the pre-coronavirus years. Contrary to initial expectations, their owners are not selling them – definitely not on a mass scale. Investors’ interest in buying remains strong – more than one-third of them are “very” or “highly” interested in Prague according to Cushman & Wakefield’s current Hotel Investor Beat survey. Investors obviously trust Prague’s hospitality market and perceive its current situation as temporary. “I see the principal cause in the restrictions imposed on hotels and travel in the Czech Republic, and also in the trend in the number of infected people. Every increase in this number translated to a decrease in hotel occupancy and booking rates. Once the restrictions were lifted last July and August, occupancy grew immediately and Prague quickly outperformed other European destinations,” says Bořivoj Vokřínek, Partner, Strategic Advisory, Head of Hospitality Research EMEA, Cushman & Wakefield Accordingly, we can expect the figures for July and August 2021 to also be more positive than those for the first half of this year. Prague has a better position for the recovery of tourism...

by Prague Morning Aug 19, 2021

Zeman: NATO’s Failure in Afghanistan Puts its Legitimacy in Question

Czech President Milos Zeman said NATO had failed in Afghanistan and its legitimacy was in question, as he called for his country to focus on national defense rather than “wasting money” on the alliance. The Czech Republic has pledged to raise its defense spending to 2% of gross domestic product, the NATO target level, by 2024, but the government said in June that this deadline would not be met due to the economic crisis after the coronavirus pandemic. Zeman, known for his pro-Russia and pro-China stance, said that NATO’s main role was to fight global terrorism, but the alliance has failed at that task now. “The distrust towards NATO from a number of member countries will grow after this experience because they will say – if you failed in Afghanistan, where is a guarantee that you won’t fail in any other critical situation?” Zeman said in an interview published by Parlamenty Listy on Tuesday, a website favored by the president for airing his views. “Now that investing in NATO is kind of wasting money, our defense spending should focus on national defense, on national (military) procurement,” Zeman said. NATO said on Tuesday that the Taliban must not let Afghanistan become...

by Prague Morning Aug 18, 2021

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