Representatives of unions, industry and the government met on Friday for three-way talks on the proposal for next year’s budget. Union and industry representatives said that the finance ministry’s draft budget was not conducive enough to economic growth and that the caretaker government should not be so strict in complying with the EU-mandated deficit ceiling of three percent of the GDP. After the talks, Prime Minister Jiří Rusnok announced that the government will not change the 112-billion crown deficit proposed in the draft budget, which is just below three percent of GDP. The outgoing government will be voting on the final proposal next Wednesday, though it will not be discussed by the lower house of parliament until after the general elections in late October. The budget proposal may be significantly altered by the new government and lower house.
Prime Minister Jiří Rusnok told reporters on Friday that if the owners of the Paskov mine in northern Moravia were to act as gentlemen in negotiations with the government, it would be possible to keep the mine open until 2016. The mine’s owner OKD announced earlier this week that it is planning to close the mine by the end of 2014, claiming that it has not been profitable for some time. The mine currently employs some 3,000 workers, in a region that already has high unemployment. OKD said that with financial help from the government, it would be willing to keep the Paskov mine open longer, but on Wednesday Prime Minister Rusnok refused to provide any subsidies to the firm. The government will open negotiations with OKD’s shareholders next week in an effort to keep it open for another three years.
Business News: Czech consumers can look forward to cheaper electricity prices, Paskov mine facing closure after government refuses bailout, Czech Photovoltaic Association may challenge the law restricting support for renewable energy sources and 2014 draft budget projects public spending gap below 3 percent of GDP.
In related news, the Social Democrats have dismissed a request by the owners of the unprofitable Paskov mine in north Moravia for government assistance to postpone its closure. Deputy chair of the Social Democrat party, Lubomír Zaorálek, told reporters on Wednesday the demand was outrageous. The Social Democrats are expected to win the upcoming general election and form the country’s next government.
The EU’s new tobacco laws could put hundreds of Czech jobs at risk, President Miloš Zeman told reporters in Brussels on Wednesday, the first day of his visit to EU headquarters. After a meeting with the speaker of the European Parliament, the Czech president expressed hope that during debates on the new rules, MEPs would take into consideration the interest of 1,500 employees of cigarette producer Philip Morris’s Czech plant. The planned EU directive on tobacco products includes a ban on some types of cigarettes such as slims and menthols, and would force producers to place bigger pictorial health warnings on packets.
The Czech government has refused aid to the mining firm NWR which plans to
cut some 3,000 jobs at its unprofitable Paskov mine in north Moravia. The
interim cabinet will not pay any debts of firm’s owners, will not buy
firm’s subsidiary or the Paskov mine itself, Prime Minister Jiří
said on Wednesday. Instead, the government will focus on assisting those
who will lose their jobs, Mr Rusnok added, arguing it made no sense to
a mine running which loses 1.5 billion crowns each year.
New World Resources said they would close the Paskov mine by the end of next year, a move that would cut around 3,000 jobs. The firm said that if they received between four and six billion crowns in assistance from the Czech government, they would close the plant in 2018.
Hundreds of angry miners took to the streets of Ostrava on Tuesday to protest against planned wage cuts and growing job insecurity in the region. After a year of negotiations employers and trade union representatives are nowhere near reaching a deal on the 2014 to 2018 collective agreement, and there is a growing fear of layoffs in a region that already has over 100,000 unemployed.
Czech trade unions want the next cabinet to abolish a number of reforms carried out by the previous centre-right administration of Petr Nečas, representatives of the country’s trade union umbrella organization said at a press briefing on Monday. Among the reforms they want abolished is the so-called second pillar of the pension system within which people can transfer part of their compulsory social contributions from the state pay-as-you-go system to private companies. The Social Democrats, who are slated to win the elections, have already said they are prepared to scrap the second pillar. The list of trade union demands also includes minimum wage growth, the construction of 50,000 flats and the introduction of social housing which the Czech Republic completely lacks.
The labour ministry has exhausted four-fifths of its budget for people or families in emergencies or crisis this year: 7.5 billion crowns in the first seven months – 1.7 billion more than the same period in 2012. More individuals and families have signed for social benefits or welfare, and unemployment did not improve, the Labour Office’s report notes. This year, more funds went to the unemployed and the handicapped.
In Business News this week: Czech public debt reaches new high; unemployment remains at 7.5 percent in August; Senate curbs subsidies for renewable energy sources; tighter rules are introduced for liquor retailers; prices of potatoes and dairy products jump; and record number of dollar millionaires recorded in Czech Republic.
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