Excessive red-tape and arrogant civil servants have long been a problem in the Czech Republic. A recent study conducted by the Prague-based Westminster Agency indicated that little has changed in this respect in the last 18 years. The agency says that it is not the performance of civil servants that's at the core of the problem - it is their attitude and the fact that little has been done to change it.
In Business News this week: the profits of large industrial companies in the Czech Republic grow by 31 percent; the country falls in an international Doing Business survey - and is warned to reform its tax and legal systems; most construction firms in the Czech Republic admit to hiring illegal workers; Czechs get paid the second most per hour of all the countries which have joined the EU since 2004; and Skoda Auto opens the country's biggest company educational complex in Mlada Boleslav.
The Czech Ministry of Labour and Social Affairs has been fined 100,000 crowns, or more than 5,000 U.S. dollars, by the anti-monopoly office for the manner in which it selected a company to supply it with an information system. When choosing the supplier last year, the ministry omitted to announce a public competition for the order worth of 50 million crowns. The ministry was already punished last year for a similar offence and paid a fine of 500,000 crowns, or over 25,000 U.S. dollars.
The Czech Republic saw a record number of vacancies on the job market in August - Labour Offices around the country were advertising more than 130,000 jobs last month, 10,000 more than the previous month. But what sounds like great news for the Czech economy is actually causing headaches for some firms.
Ministry of Defence spokesman Andrej Cirtek announced on Monday that the ministry wants to reduce its number of employees by up to 1200 between 2008 and 2010. The job cuts are part of a planned streamlining of the military to ensure that the Czech Republic is better equipped to fulfil tasks ensuing from its membership of NATO, the EU and the UN. Cirtek added, however, that it was too early to specify which areas of the military would be affected by the job cuts. The ministry currently employs 25,000 career soldiers and 20,000 civilian personnel.
Around 500 teachers are to hold a public demonstration outside government offices on Wednesday in support of demands for better pay. The Bohemian and Moravian Educational Workers Union is demanding a 5-percent pay increase for teachers as opposed to a 1.5 -percent increase offered by the Ministry of Education. A spokesman for the union warned that a failure to meet teachers' pay demands could have a detrimental effect on the school system. The Minister for Education Dana Kuchtova said that the government was only offering teachers the same pay increases as other workers in the state sector.
Employing people on a cash-in-hand basis is already illegal in 17 of the European Union's 27 member states. Now, the Labour Minister, Petr Necas, wants to clamp down on the practice here in the Czech Republic too. He plans to punish employers who fail to declare members of their workforce. How? By levying them with heavy fines or even sending them to prison.
Trade unions representing state sector employees failed to reach agreement on a wage increase for next year in talks on Friday, although negotiations are set to continue. Workers in the sector would like to see an increase of about six or seven percent, something opposed by Labour and Social Affairs Minister Pet Necas and Finance Minister Miroslav Kalousek, who do not want to go beyond 1.5. Mr Necas has said a quicker pay increase is unacceptable for the government, aiming to tackle the public finance debt.
In Business News: uncertainty remains about when the Czech Republic will introduce the euro, after the government approved an adoption plan - without a target date; the central bank surprised many with a second quarter-point interest rate hike in two months; the average salary was 7.4 percent higher in the second quarter than in the same period in 2006; changes to the labour code are intended to increase flexibility; power giant CEZ hooks up with Hungary's MOL; and Ikea plans to double its regional presence over the next decade.
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