The Czech Republic´s central bank has increased its key interest rate by a quarter-point to 0.75% to tackle inflation amid the economy´s rebound from the coronavirus pandemic. It was the second such increase in about two months. In June, the Czech National Bank raised key interest rates, by 0.25 percentage points to 0.5 percent. Analysts say the main reason is fears of rising inflation related to the ongoing economic recovery, and the market expects two more rate increases this year. Analysts had predicted Thursday´s move, and a member of the bank´s board had indicated that the rate might be hiked further later in the year as the bank considers high inflation as a major threat. The increase in the key rate will inevitably lead to a further rise in the cost of consumer goods and mortgage loans. How abruptly this happens depends on the strategy of each particular bank. Inflation reached 2.8% in June, above the bank´s 2% target, as the economy registered a record 7.8% year-on-year growth in the second quarter.
For this year’s elections to the Chamber of Deputies, 22 electoral groups submitted candidate lists. There are about a third fewer of them than in the last election four years ago. At that time, 31 parties and movements supplied candidates. The deadline for nominations ended today at 16:00. As in previous years, not all groups registered their adepts for deputies in all regions. Voters could have the largest selection in Prague and in the South Moravian Region, where 21 candidates were submitted. On the contrary, 17 candidates met in the Karlovy Vary, Ústí nad Labem, Liberec and Hradec Králové regions. As expected, the candidate lists were submitted by all parliamentary parties, which according to polls have a chance to re-occupy parliamentary seats. YES, SPD, CSSD, and KSCM run separately, ODS, KDU-CSL and TOP 09 formed a coalition Together, the coalition candidate was also formed by Pirates with Mayors. Representatives of the Tricolor joined the Private and the Free as one electoral party. He would also like to keep his Free Bloc seats in the Chamber. However, according to surveys, the new movement The Oath of Former Policeman Robert Šlachta is more favored. The New Electoral Party is also the Sources Movement, which includes, among others, the Path...
Shareholders of Moneta Money Bank last month decided the acquisition of Airbank won’t happen this year. It was the second attempt to merge those two banks, however, the general meeting failed to reach a majority to support it. Even though more than half of the present shareholders agreed with the acquisition of Airbank, they failed to reach the necessary 75% of votes in favor of the issuance of new shares. Issuance of new shares is necessary for the deal to happen in order to raise more capital for the new entity. The acquisition was anticipated by experts, many of whom argued the new bank would increase competition in the market. While in general, decreasing the number of market players tends to worsen competition, Vladimír Staňura, adviser to the Czech Banking Association, argued in an interview for penize.cz that the new entity may put competitive pressure on the three banks that dominate the Czech market. Indeed, the three largest commercial banks in the Czech Republic, Česká Spořitelna, ČSOB, and Komerční Banka have remained in their dominant positions since their establishment in the late 1990s and early 2000s. Many new players have since them attempted to challenge those three banks but none...
There were not enough skilled workers in the Czech Republic before the coronavirus crisis hit the country. Now that the nation is in the process of reopening its economy, the problem is coming back. Many businesses report that the labour shortages that blighted the Czech economy before the pandemic are already an issue amid the very earliest stages of reopening. “Companies were already expecting in January that recruitment would be the biggest obstacle to the development of their businesses this year,” said Karina Kubelkova at the Czech Chamber of Commerce, “and they’re confirming that now.” Analysts note that while Czech unemployment expanded over the last year, it wasn’t by much. Joblessness at the end of the first quarter stood at just 3.2%, the second-lowest in the EU after neighbouring Poland. The tight market means that the cost of labour continues to rise. In May, the average monthly wage rose by 3.2% compared with a year earlier to 35,285 Czech crowns, and analysts expect it to accelerate sharply. It’s taken little time for these abstract macroeconomic data to become a very real headache for companies eager to make up for lost time. In the years ahead of 2020, the difficulties of...
According to the survey, 58 percent of Czechs can easily live on their income. On the other hand, 40 percent of people admit to financial struggles. The assessment of the economic situation of one’s household is thus the best since 2002 when the Center for Public Opinion Research (CVVM) started this survey. One-fifth of those who responded consider their household to be poor, which is the lowest proportion since the inception of the survey. The assessment of the economic situation of households has been steadily improving since 2013. The worst evaluation was recorded in 2012, when only 30 percent of respondents could easily manage to live on their income. “This was not an accidental fluctuation, but a gradual deterioration after 2008, in parallel with the global economic recession. On the contrary, we have been observing a gradual improvement since 2013, and despite the undercurrent of the coronavirus pandemic, this year’s evaluation is the best for the entire period under review,” said the statisticians. The first public poll, when the share of positive evaluation outweighed the negative one, was in 2017. Subjective assessment of household income is highest for university degree recipients, self-employed, and managers. Meanwhile, financial difficulties are more often...
A Belarusian athlete who refused to board a flight after she said she was taken to the airport by her team against her wishes was “safe and secure” in Tokyo, the International Olympic Committee said on Monday. Krystsina Tsimanouskaya, 24, spent the night in an airport hotel after she went to Japanese police at Haneda airport seeking protection late on Sunday, IOC spokesperson Mark Adams told a media conference. A number of agencies were in contact with the sprinter, including the United Nations High Commissioner for Refugees, he added. In a brewing diplomatic incident, it was unclear where Tsimanouskaya would end up with both Poland and the Czech Republic publicly offering her assistance. “She has assured us she is safe and secure. We are talking again to her this morning to understand what the next steps will be,” Adams said. “We need to listen to her, find out what she wants and support her in her decision.” The sprinter, who was due to race in the 200 metre heats at Olympic Stadium on Monday, had her Games cut short when she said she was taken to the airport to board a Turkish Airlines flight. “The head coach came over to...
The average income in euros in the Czech Republic is €1,368 (CZK 34,932), the highest among the Visegrad Four countries. The nation with the highest average wage in Central and Eastern Europe is Germany, specifically with €3978 (101,578 CZK), followed by Austria with €3108 (79,363 CZK). The lowest average wages are €400 (CZK 10,214) in Kosovo and €432 in Ukraine (CZK 11,031). These calculations are the result of an annual study by the consulting company Mazars, which compares the tax systems of 21 countries in Central and Eastern Europe. According to the study, the average level of wages in euros has increased the most in the private sector. In Germany, the increase is by 14 percent, and in Slovakia, Croatia, Latvia, and Northern Macedonia, by 5-10 percent. In Poland, the average wage is €1331, in Hungary €1147, and in Slovakia €1113. The study also states that taxes and compulsory employers’ contributions related to people’s employment have tended to fall this year in 21 European countries. On average, the ratio of employer’s costs to gross wages for taxes and compulsory levies is 15 percent. However, there are differences between countries. While in Romania the levies are less than 5 percent of...
The European Commission approved on Wednesday the Czech Republic’s 7 billion euro plan to recover from the pandemic and transform the economy to become greener and more digitalised. The scheme will be financed from EU grants until 2026. Once the plan is also approved by EU finance ministers, Czechia will get 910 million euros in pre-financing for projects foreseen under the plan. The funding is part of an initiative under which all the bloc’s 27 nations are to get money from an EU recovery scheme worth 800 billion euro. The Commission, which has concluded that Czech Prime Minister Andrej Babis is in conflict of interest as final owner of a business empire that receives EU funding, said the Czech Republic needs to improve transparency and preventing conflict of interests when distributing the funds. “(The Czech side) has received a qualified audit opinion due to the absence of effective measures targeting the prevention, detection and correction of cases of conflict of interest,” the Commission said in a proposal for the European Council, without mentioning any concrete people or companies. “Dedicated milestones shall be established to ensure that those weaknesses will have been addressed before the first payment request,” the proposal said....
Commission President Ursula von der Leyen will be in Prague today, July 19, to present the Commission’s assessment on the national recovery and resilience plan under NextGenerationEU. On Monday morning, President von der Leyen will meet Prime Minister Andrej Babiš, together with Vice-President Věra Jourová. She will also visit the Prague State Opera and the State Opera and National Museum, and discuss investments in energy efficiency. The Czech Republic will receive CZK 180 billion from the European Union emergency fund to revive the economy after the coronavirus crisis. The country will probably receive the first money in September after it has been approved by the finance ministers of the EU member states. The Commission received the Czech investment strategy at the beginning of June and had two months to evaluate it. von der Leyen’s experts did not find any major mistakes in the plan that would force Brussels to exceed the deadline and demand redress, as was the case in Hungary. The Czech Republic has met all the key criteria, according to which, for example, 37 percent of the money is to be earmarked for climate-friendly projects and 20 percent for digitization. Von der Leyen, who has already covered more than...
On 13 July, the European Investment Bank (EIB) announced that it has invested EUR 191 million for the development of regional and municipal infrastructure projects in the Czech Republic. The funds will be given as a loan that will support the Czech-Moravian Guarantee and Development Bank (ČMZRB): the main provider of financial instruments in the country. According to a press release by the EIB, ČMZRB is funded by both national resources and EU funds. As such, it works with the EIB group to contribute to the economic and social development of the country and its regions. It is a well-known fact that the past year has caused severe damage to various industries and the economy. Now, part of the EUR 191 million loans is expected to help the Czech economy recover from the negative impact of the pandemic. In addition to this, financing will be provided for the renovation, upgrade, replacement, and reorganization of urban infrastructure in the entire country. This will include the modernization of social, cultural, and administrative buildings. Beyond this, the environmental and energy efficiency of public buildings will also be improved. Finally, the projects will further focus on the improvement of transportation and healthcare infrastructure. In this way, EIB...
The Czech Republic will not take part in this year’s UN conference against racism taking place in September in New York. “I’ve taken this decision due to historic concerns regarding antisemitism and the misuse of the platform for attacks against Israel,” stated Czech Foreign Minister Jakub Kulhánek, adding that the country will continue to fight against racism and discrimination. The so-called Durban conference will mark the 20th anniversary of the World Conference Against Racism, Racial Discrimination, Xenophobia and Related Intolerance and the adoption of the Durban Declaration and Programme of Action. Austria and the Netherlands have already decided to boycott the event. Last week, the UK said it was joining the US, Canada and Australia in boycotting Durban IV this September, “following historic concerns regarding antisemitism.” France is also expected to pull out, a diplomatic source said last month, but it has not yet issued an official statement. A German Foreign Ministry official said Berlin had yet to decide on the matter. Kulhánek announced his decision on Monday in Brussels, where he met with his EU counterparts and Israeli Foreign Minister Yair Lapid. According to Kulhánek, a large part of EU countries supported the idea of enhanced cooperation with Israel. The Czech minister...
Unemployment in the Czech Republic fell for the fourth month in a row. It fell to 3.7 percent in June, which is two-tenths of a percentage point less than in May and the same as last June. The decline is mainly due to the start of the economy following the release of measures against the spread of coronavirus. According to analysts and the Labor Office of the Czech Republic, the unemployment rate will not rise significantly and may continue to decline slightly in the coming months, unless the epidemic situation worsens and the measures become stricter. The situation in the labor market should not be negatively affected by the suppression of the Antivirus program, through which the state contributed to companies’ wages. Compared to the previous month, the number of jobseekers in the register of labor offices decreased by approximately 12,500 to 273,302, while the number of job vacancies increased by 9,000 to 355,612. Compared to last year, 3,665 more people were looking for work in June this year, but the number of vacancies also increased year on year, by more than 20,000. According to experts, the reason for the further decline in unemployment is mainly the improving pandemic situation and...
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