In Business News this Friday: Industry & Trade Minister warns up to 1,000 could be lost due to EU sanctions; Ahold gets ready to transform former Interspar supermarkets; Vítkovice Steel will shut down Ostrava plant; Travel Service will no longer offer charter flights to Bangkok; Czechs take healthy interest in their finances.
The Czech Republic has secured another major foreign investment with the South Korean car parts maker Hyundai Mobis signing a deal to build a factory outside Ostrava. It’s the third large South Korean investment project in the Czech Republic – but new EU rules on incentives could make it harder for the country to attract big foreign investors in the future.
The European Union on Tuesday agreed on the toughest new sanctions so far against Russia. The move comes after the country was charged it had supplied heavy weapons to rebels in Ukraine and following outrage that international investigators were still being prevented from visiting the crash site of MH 17.
The Czech Republic’s Export Bank and Slovakia’s Eximbank are to sign an agreement on cooperation in supporting joint Czech and Slovak business ventures abroad. The agreement, which is to be signed in the Slovak capital Bratislava on Tuesday, aims to bolster the two countries’ positions particularly on markets in the Far East where the now defunct label Made in Czechoslovakia still has a high brand awareness. The head of the Czech Export Bank Karel Bureš told the daily Mladá fronta Dnes that the agreement did not envisage the revival of the Made in Czechoslovakia label, an idea that was recently rejected by the Slovak president, but merely intended to support the two countries’ joint presence in business ventures and thereby increase their competitiveness.
Amid the tourist bustle of central Prague this week a tour with a difference was taking place. Czechs turned up in their droves when development company Flow East opened the doors to some of its historic buildings. But the developer’s first initiative of its kind is linked to its ongoing battle with Prague planners and politicians.
Czech exports to Ukraine dropped by 43.1 percent in May compared to the same period a year earlier after a fall of 51.2 percent in April, according to the Czech Statistics Office. During the first five months of this year they have fallen by 3.7 billion crowns, or just short of 30 percent. According to business grouping the Confederation of Industry of the Czech Republic, Ukraine now risks being excluded from the Ministry of Industry and Trade’s list of 12 priority countries for exports, the confederation said. The list highlighted states where efforts would be made to boost Czech exports until 2020. The confederation warned that no improvement in business looked likely in the short term due to the ongoing crisis in Ukraine.
President Miloš Zeman who attended Monday’s cabinet meeting praised the ruling coalition for its willingness to spend money on investment projects, saying it had given the public “reason to hope” in a better future. Mr. Zeman took part in the government session primarily to emphasize the need for the government to strengthen the sphere of economic diplomacy and push ahead with plans to expand Czech business interests beyond EU borders. He mentioned in particular Russia, China, South Korea, Kazakhstan and Turkmenistan as offering considerable potential.
Czechs this week joined other central and eastern European countries in rolling out a new virtual currency called Czech Crown Coin (the CZC), a local alternative to other virtual currencies like the worldwide Bitcoin. The aim is to provide a Czech alternative for transactions and to boost support for online business.
The Višegrad Group states and South Korea have agreed to broaden bilateral cooperation in the areas of business, science and culture, the ctk news agency reports. At a meeting in Bratislava on Thursday Czech, Polish, Slovak, Hungarian and South Korean officials discussed potential areas of cooperation. The Višegrad Group countries have attracted plenty of South Korean investors. Most recently the tire manufacturer Nexen chose the Czech Republic for its 23 billion crown investment, a tire plant that is expected to create over 1,000 new jobs.
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Screenshot: a hybrid English-friendly Prague art-house cinema where screenings are events