Plans for US-based e-commerce giant Amazon to build a second distribution centre on the outskirts of the Czech Republic’s second city, Brno, appear to have been thwarted. Other Czech sites are also being offered while Slovakia is also trying to land the investment and the estimated 2000 jobs going with it.
Fragile Czech growth could be wiped out if the Ukraine crisis take a worse turn and sterner sanctions are imposed by the European Union, including the Czech Republic, and Russia retaliates. Exports of Czech machinery and engineering equipment could be threatened and Russian tourists could head elsewhere.
In spite of paying lip service to the principle of equality, the Czech Republic has seen an increasing trend in recent years towards the rich getting richer at the expense of the rest. Tax systems have got more regressive with the scope for distributive spending reduced amid fiscal constraints. Now even the IMF is warning that increased inequality is not a good recipe for growth.
The Czech Republic and local car maker Škoda Auto appear to have won the battle with Spain and auto maker SEAT to build a new large sports utility vehicle. Strong behind the scenes lobbying by Czech Prime Minister Bohuslav Sobotka has been one of the factors in the Czech campaign to land the investment.
Statistics reveal that women who go on maternity leave find it hard to return to their former jobs and face what labour market experts call hidden forms of discrimination. Despite government incentives many Czech firms avoid employing young mothers and their former employers often refuse to grant them part-time jobs. Consequently the Czech Republic has one of the highest unemployment rates of mothers in Europe.
Talks about the possible Russian participation in a project to build new nuclear capacity alongside Czech utility ČEZ have collapsed. The tale here is not of Temelín and tough Czech retaliation against Russian intervention in Ukraine, but of Slovakia and ČEZ’s ill-fated joint venture with the Slovak government.
A new package of investment incentives is being drawn up with the onus on cutting company payments rather than forcing them to reclaim cash from the state. The new rules could cushion some of the impact of stricter European regional aid rules which are expected to blunt the Czech Republic’s use of this incentive for investors.