Politics & Economics

EU Commission Confirms PM Babiš Has Conflict of Interest

The audit report published today by the European Commission confirmed that Czech Prime Minister Andrej Babiš is in a conflict of interest. According to the report, Babiš still controls trust funds in which he transferred Agrofert Holding. The report thus confirms previously published findings by Czech authorities. Babiš controls the Agrofert conglomerate — which includes a wide range of companies in the agri-food sector — despite having transferred his assets into two trust funds in 2017 after a Czech transparency law was passed. Subsidies received by companies since February 9, 2017, are, therefore, unjustified. “Mr. Babiš controls both trust funds and, through these trust funds, also controls the Agrofert group,” the report states, adding that the prime minister has a direct economic interest in the success of Agrofert. Preliminary findings of the EU audit found that the Czech Republic should return up to 450 million Kc worth of EU funds unlawfully received by Agrofert or companies linked to the conglomerate. Under the Czech conflict of interest act, subsidies or sweeteners are forbidden for commercial enterprises in which a public official holds a stake of 25 percent or more. Companies in the Agrofert group, the core of Babis’s assets estimated at...

by Prague Morning Apr 23, 2021

Prices for New Apartments in Prague Rose by 5.5 Percent

Year-on-year sales prices for new apartments in Prague have increased by an average of 5.5 percent to CZK 112,233 per square meter compared with 2.2 percent appreciation last year, housing developers report. Data from construction companies also showed that the number of apartments sold has skyrocketed by about three-fifths to 2100, the most in the last ten years. At the same time, the number of apartments offered has dipped by more than a one-tenth to 4200, the least in the last three years. By category, developers sold mostly two-room apartments, namely 44 percent. They were followed by one-bedroom apartments (23%), three-bedroom apartments (22%) and four-bedroom apartments (11%). Of the individual districts of the city, developers sold the most apartments in Prague 5 (23%), Prague 9 (18%) and Prague 4 (16%). In contrast, in Prague 1 and 2, only three percent of all the apartments were sold. Housing developers claim prices will continue to rise provided that local governments approve new projects at the same pace as they do now. “Currently, the market is experiencing record-high demand for new housing. The highest in ten years, actually. However, the situation is still complicated due to the lack of new residential housing construction,...

by Timur I. Apr 23, 2021

The Czech Republic Will Expel More Russians Diplomats

The Czech Republic on Thursday ordered more Russian diplomats to leave the country, further escalating a fierce tug-of-war between the two nations over the alleged involvement of Russian spies in a massive ammunition depot explosion in 2014. Foreign Minister Jakub Kulhanek said Russia won’t be allowed to have more diplomats in Prague than the Czechs currently have at their embassy in Moscow. All others have to leave by the end of May, he said. The announcement came after Russia expelled 20 Czech diplomats on Sunday in retaliation for the Czech government´s expulsion of 18 Russian diplomats it identified as spies from the GRU and the SVR, Russia´s military and foreign intelligence services. The Czech government protested what they called Russia´s “inappropriate reaction,” saying it paralyzed the Czech Embassy in Moscow. Kulhanek had given the Russian government a Thursday noon deadline to allow the return of the 20 Czech diplomats. He warned that if the demand was not met, he would reduce the staff of the Russian Embassy in Prague to equal the number of staff members remaining at the Czech Embassy. The minister said Russia did not give an official response. The Russian Foreign Ministry summoned the Czech ambassador to...

by Prague Morning Apr 22, 2021

Czech Republic’s Economic Level Surpasses Spain, Portugal

The Czech Republic’s economic level, which is based on the current purchasing power parity of a country, will rise to 88 percent of the average of 19 euro area countries next year. The Czech Republic is thus getting closer to Italy in this regard and is better off than Poland, Hungary, Slovakia, Portugal, and Spain. Last year, the Czech gross domestic product (GDP) per capita in relation to the euro area was also at 88 percent, but this year it will probably fall to 87 percent. The Czech Ministry of Finance pointed out that, according to estimates, GDP per capita in current purchasing power parity decreased last year due to the effects of the pandemic in all monitored countries except Lithuania. The largest decline in GDP was recorded in southern European countries with a greater focus on tourism, especially in Spain, France, Portugal, and Italy. “Although GDP per capita in terms of current purchasing power parity in the Czech Republic probably fell last year, the relative economic level vis-à-vis the euro area might have risen slightly to 88 percent. It could be around this level in 2021 and 2022 as well,” said the Ministry of Finance. According to the Ministry’s...

by Prague Morning Apr 20, 2021

Prague Demand That Russian Embassy Vacate Area of 5,000 Square Meters

The decision was made amid a sharp escalation of relations between Russia and the Czech Republic, following the expulsion of 18 Russian Embassy employees and accusations of Russian intelligence’s involvement in explosions at arms depots in 2014. Prague authorities demand that Russian Embassy vacate an area of 5,000 square meters, currently occupied by the diplomatic mission. Before 1968, the mentioned area was a part of the adjacent Stromovka Park in Prague 7. “The Prague city council called on the Czech government to hold negotiations in a bid to bring the Russian Embassy territory to the state that preceded the Warsaw Pact forces invasion in 1968,” he tweeted. According to the Czech media, the area in question is about 5,000 square meters. The city authorities plan to plant trees and flowers in this area, as it was prior to August 1968, when a soviet military camp was deployed there. Czech Prime Minister Andrej Babis and First Deputy Prime Minister Jan Hamacek on Saturday announced the expulsion of 18 employees of the Russian embassy in Prague, who were allegedly “officers of Russian special services.” The move came in the context of the newly leveled circumstance of the 2014 blast at the ammunition depot...

by Prague Morning Apr 19, 2021

Russia Expels 20 Czech Diplomats, Orders Them to Leave by Monday

Russia on Sunday expelled 20 Czech diplomats in retaliation for a slew of diplomatic expulsions by Prague and gave the affected Czech diplomats just over 24 hours to leave the country, the RIA news agency quoted the foreign ministry as saying. Prague had on Saturday ordered out 18 Russian diplomats, prompting Russia to vow on Sunday to “force the authors of this provocation to fully understand their responsibility for destroying the foundation of normal ties between our countries”. The October 16, 2014, blast in Vrbetice, in the eastern Czech region of Zlin, set off 50 metric tons of stored ammunition, killing two people. Two months later, another blast of 13 tons of ammunition occurred at the same site. Czech Prime Minister Andrej Babis said the attack had been aimed at a shipment to a Bulgarian arms trader. “This was an attack on ammunition that had already been paid for and was being stored for a Bulgarian arms trader,” he said on Czech Television. Bulgarian prosecutors charged three Russian men in 2020 with an attempt to kill arms trader Emilian Gebrev, who was identified by Czech media as the same individual. Reuters was unable to reach Gebrev for comment. Czech police...

by Prague Morning Apr 18, 2021

Russia Says It Will Retaliate Hard Against Czech Republic Over Diplomat Expulsions

Russia’s Ministry of Foreign Affairs said on Sunday it would take tough retaliatory measures against the Czech Republic over Prague’s expulsion of 18 Russian diplomats on what Moscow said were unfounded and absurd grounds. The Czech Republic expelled 18 Russian embassy staff on Saturday over the suspected involvement of Russia’s intelligence services in a 2014 ammunition depot explosion that killed two people. “We will take retaliatory measures that will force the authors of this provocation to fully understand their responsibility for destroying the foundation of normal ties between our countries,” the ministry said in a statement. “The Czech Republic took the Russophobe line of the US by expelling Russian diplomats. This step was completely unfounded and had no relation to the 2014 events,” said the Head of the Russian State Duma Committee on Foreign Affairs Leonid Slutsky. “Prague is well aware what follows such ‘tricks’,” added Russian Foreign Ministry Spokeswoman Maria Zakharova. French and British Support Speaking about the latest developments in the Czech Republic, Britain’s Foreign Secretary Dominic Raab said: “The UK stands in full support of our Czech allies, who have exposed the lengths that the Russian intelligence services will go to in their attempts to conduct dangerous...

by Prague Morning Apr 18, 2021

Prague to Discuss Vrbětice Explosion Case With EU Counterparts on Monday

The Czech Republic’s Deputy Prime Minister and Interior Minister Jan Hamacek plans to discuss the incident in the country’s Vrbětice at the EU foreign ministers’ meeting on Monday. “I have tasked our representatives in the EU and NATO to inform our allies about the Vrbětice case. I will speak about this on Monday at the EU foreign ministers’ meeting,” Hamacek said. The tensions between Moscow and Prague escalated after Prime Minister Andrej Babis claimed the Russian special services were involved in the Vrbetice ammunition depot blast that killed two people in 2014. Russia stressed that such accusations were absurd and promised to respond in kind to the expulsion of diplomats. “The Czech Republic took the Russophobe line of the US by expelling Russian diplomats. This step was completely unfounded and had no relation to the 2014 events,” said the Head of the Russian State Duma Committee on Foreign Affairs Leonid Slutsky. “Prague is well aware what follows such ‘tricks’,” added Russian Foreign Ministry Spokeswoman Maria Zakharova. Britain stands in ‘full support’ Britain stands in “full support” of the Czech Republic which has exposed the lengths Russian intelligence services will go to, foreign minister Dominic Raab said on Sunday after Prague expelled 18...

by Prague Morning Apr 18, 2021

“This is Absurd, Czechs Have Apparently Decided to Close Their Embassy in Moscow,” Russians React

The Czech Republic “has apparently decided to close its embassy in Moscow” by expelling 18 Russian diplomats, the Interfax news agency quoted an unnamed diplomatic source as saying on Saturday. The Interfax news agency cited Vladimir Dzhabarov, first deputy head of the upper house’s international affairs committee, as saying Prague’s claims were absurd and Russia’s response should be proportionate. The Czech Republic is expelling 18 Russian diplomats over suspicions that Russian intelligence services were involved in an ammunition explosion in 2014, Prime Minister Andrej Babis and Foreign Minister Jan Hamacek said earlier on Saturday. He added that President Milos Zeman, who is known for his pro-Russian views, has been informed about the development and has “expressed absolute support for us.” Hamacek said the staff identified as secret service personnel would be ordered to leave the Czech Republic within 48 hours. Separately, Czech police said on Saturday they were searching for two men carrying various passports, including Russian ones in the names of Alexander Petrov and Ruslan Boshirov. Those names were the aliases used by two Russian military intelligence officers who British prosecutors charged with the attempted murder on British soil of Russian spy Sergei Skripal. Skripal and his daughter Yulia were...

by Prague Morning Apr 17, 2021

Two-Thirds of New Investments in the Czech Republic Have High Value Added

The coronavirus pandemic has helped to accelerate CzechInvest’s efforts in recent years. Despite the crisis, there is a rising trend in the share of investments with high value-added, i.e. investments focused on technology and research and development in strategic sectors. In 2020, this involved two-thirds of all investments arranged by CzechInvest, whereas only one-fifth of new projects in 2018 fulfilled the criterion of high value added. A quarter of last year’s projects are smart, i.e. localized so that they benefit the given regions, particularly those that are structurally disadvantaged. Near 80% of the arranged investments comprise expansions of companies that are already operating in the Czech Republic. The situation here thus also mirrors international trends. “In 2020, we arranged 27 new investment projects in which the companies have pledged to invest CZK 13.5 billion in the coming years. Despite a certain decline associated with the coronavirus pandemic, investors remain interested in placing their projects in the Czech Republic. Furthermore, we anticipated a lower number of projects due to the stricter conditions arising from the amendment to the Investment Incentives Act. So, we are all the more pleased that in spite of these facts, two-thirds of the arranged investments will bring...

by Prague Morning Apr 16, 2021

The Czech Republic is Ready to Withdraw Troops from Afghanistan

The Czech Republic respects the agreement of the ministers of defense and foreign affairs of NATO states on the withdrawal of troops from Afghanistan and is ready to do its part, confirmed Lubomír Metnar, Czech minister of defense. As NATO reports, the drawdown will commence on May 1st. “We cannot continue the cycle of extending or expanding our military presence in Afghanistan, hoping to create ideal conditions for the withdrawal and expecting a different result,” said US President Joe Biden in his ardent speech on Wednesday. He declared that “it is time to end the forever war” and promised that US troops would leave Afghanistan by September 11th. All NATO members, including the Czech Republic, followed suit and made a statement, in which they pronounced they would start removing troops next month. “In light of… recognizing that there is no military solution to the challenges Afghanistan faces, Allies have determined that we will start the withdrawal of Resolute Support Mission forces by May 1”, was stated in the press release of the alliance. “NATO Allies and partners will continue to stand with Afghanistan, its people, and its institutions in promoting security and upholding the gains of the last 20 years....

by Timur I. Apr 15, 2021

Czech Republic Offers to Hold Russia-US Summit in Prague

On Tuesday, Russian and US Presidents Vladimir Putin and Joe Biden held their second telephone conversation since the American leader assumed office. Both leaders discussed in detail the state of bilateral relations and a number of international issues, the Kremlin press office reported. The Czech Republic is offering Russia and the US to hold the first meeting between Vladimir Putin and Joe Biden in Prague, Interior Minister Jan Hamáček said on Twitter on Wednesday. “I have instructed our [Czech] ambassadors in Washington and Moscow to offer Prague as a possible meeting place,” he said, adding that in his opinion, Prague would be a good venue for the summit as the Czech capital already hosted similar summits in the past. Hamacek reminded that on April 8, 2010, a meeting between Dmitry Medvedev and Barack Obama, who served as presidents of Russia and the US at the time, was held in Prague. The White House also informed that Biden proposed holding a personal meeting with Putin “in a third country” in the coming months and “considering the possibility of holding a personal meeting at the highest level in the foreseeable future”. Meanwhile, Kremlin Spokesman Dmitry Peskov noted that it is still “too...

by Prague Morning Apr 14, 2021

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