The Czech Republic is almost constantly battling against its CEE neighbors to attract large foreign investors for whom government incentives such as tax breaks can be decisive when choosing a location for an investment venture. In given the current economic climate and downturn in investments less-developed regions especially would benefit from large inflows of investment capital, writes Jindra Předotová, a consultant at Deloitte Advisory.
Zdeněk Tůma has been named to an advisory committee which should propose what reforms to make to the EU's banking sector. The advisory group has been put together to advise interventionist French Commissioner Michel Barnier, although Tůma has not been noted in the past for favoring too much central or local regulatory measures.
New moves to raise revenues and cut spending by the Czech government have brought an immediate backlash with the main opposition party, the left-of-center Social Democrats (ČSSD), calling for a vote of no confidence in the fragile center-right coalition. The government already looks divided over the mooted austerity measures and could get more shaky as they are firmed up, but the prospect of election anihilation should encourage some voting discipline.
Czech Minister of Industry and Trade Martin Kuba says coal remains a strategic resource and therefore the government should leave its options open, including preserving its power to expropriate land and property to make way for new coal fields. However, under the coalition agreement between the three parties in power, the government has pledged to abolish its power to evict residents in the way of mining activities.
Confidence in the Czech economy has risen f0r the second month in a row, largely thanks to industrial and service companies, the latest monthly index compiled by the Czech Statistical Office suggests. Consumer confidence, however, fell back even though unemployment fears appear to be easing.
US lawyer Ed Fagan says Czechs can profit from his latest attempt to get historic bonds honored. This time round Fagan is targeting Germany and the German bank DekaBank which he says should pay up maybe hundreds of millions of crowns related to bonds issued in the Sudetenland and Protectorate of Bohemia and Moravia during WWII.
Moody's Investors Service has placed on review for downgrade the debt and deposit ratings of 21 bank subsidiaries located in Central and Eastern Europe (CEE) and Commonwealth of Independent States (CIS) — including several Czech banks — “reflecting concerns regarding weakening capacity and/or willingness of parent banks to provide support to these subsidiaries.”
Preliminary data from the Czech Statistical Office (ČSÚ) shows GDP dropped by a seasonally adjusted 0.3% in the final quarter of 2011 compared to the previous quarter. In annual terms, however, GDP increased by 0.5% in 4Q11, it said — slower than the market consensus (0.7%).
As expected, Czech unemployment climbed in January to reach 534,089, or 9.1 percent of the active workforce from December's 8.6 percent. The ratio of job seekers to every vacancy widened to an average 1:15.5 with little improvement in the overall jobs picture expected soon.
The Finance Ministry announced Tuesday that last year its Financial Analysis Unit (FAÚ) blocked Kč 808 million of “laundered” money, i.e. funds suspected of being diverted to avoid taxation and illegally-gained funds. Over the year FAÚ received 1,970 reports of suspicious transfers of money, 83 more than in the previous year.