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CZECH REPUBLIC


 



In-depth Business Intelligence 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 85,438 69,590 56,800 39
         
GNI per capita
 US $ 6,740 5,560 5,250 66
Ranking is given out of 208 nations - (data from the World Bank)

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REPUBLICAN REFERENCE

Area (sq.km) 
78,866

Population 
10,246,178 

Density 
(per sq.km) 
132.2

Capital 
Prague 

Currency 
Koruna 

President 
Vaclav Klaus

Private sector 
% of GDP 
80%



Update No: 106 - (23/03/06)

Electoral season opens
Elections to parliament are looming in the Czech Republic. The next election to the Chamber of Representatives is scheduled for June 2nd and June 3rd. In the June 2002 ballot, the Czech Social Democratic Party (CSSD) elected 70 lawmakers to the 200-member Chamber of Representatives.
They are due two months after those in Hungary in April, which are on a knife-edge. But the Czech result seems to be a foregone conclusion. The governing CSSD looks certain to lose office.
In July 2004, Prime Minister, Vladimir Spidla, resigned from his post following a poor showing from the CSSD in the elections to the European Parliament. Social Democratic interim leader Stanislav Gross took over, but resigned last year following allegations regarding the origin of funds borrowed to buy an apartment in Prague. CSSD vice-chairman Jiri Paroubek-who served as regional development minister-formed a new coalition administration in April 2005.

ODS Stable, Social Democrats Drop 
The Civic Democratic Party (ODS) of Mirek Topolanek is still the most popular political organization in the Czech Republic, according to a poll by STEM. 28.6 per cent of respondents would vote for the ODS in this year's election to the Chamber of Representatives.
CSSD is second with 24.5 per cent, followed by the Communist Party of Bohemia and Moravia (KSCM) with 15.3 per cent, the Christian and Democratic Union - Czech People's Party (KDU-CSL) with 6.4 per cent, and the Green Party (SZ) with 5.6 per cent.
The poll shows the Greens above the five per cent threshold, which would make the party eligible for seats under the country's proportional representation system. SZ chairman Martin Bursik declared, "I'm very pleased. I was afraid that people may have given up their interest in politics, but it is turning out that it is not the case."
President Vaclav Klaus has vetoed a bill that would have given same-sex couples registered partnership status. Paroubek disagreed with the head of state's decision, declaring, "It is sad that the president has been unable to overcome his prejudices to a minority of the Czech population and does not want to allow the elimination of their discrimination." The veto could be overruled by the legislative branch.

Culture Minister Jandak is CSSD´s maverick
Culture Minister Vitezslav Jandak is a maverick of the senior ruling CSSD, who nominated him for the post, despite being without any party affiliation, who might just retrieve the fortunes of the government for all that. Jandak has been the minister since last August when he replaced late Pavel Dostal (CSSD). He is an actor by profession and he was a director of a children's film festival. 
It was Paroubek who chose unaffiliated Jandak as minister. He must have thought that he could attract those hostile to party politics and their avatars, the party placemen, but open to an unusual personality.
Indeed, CSSD politicians do not want to criticise him as Jandak is the most popular Czech politician. "Jandak makes some ministers feel really desperate. He presents absolutely unprepared issues that he does not consult with anybody," a source close to the cabinet told the paper, Lidove noviny (LN), on March 8th.
The source said that Jandak for example announced all of a sudden that he is against the liquidation of the pig farm located in Lety on the spot of a former World War Two concentration camp for Romanies though the government has an opposite stance, the paper said.
The source said that Paroubek CSSD tried to convince Jandak in this, yet Jandak is not going to change his opinion, the paper writes. "Sometimes I'm really unhappy because of his comments," lower house chairman Lubomir Zaoralek (CSSD) said.
Jandak is not aware of any criticism against him. "Social Democracy is able to accept my opinions," he told the daily.
But the case of lower house foreign committee head Vladimir Lastuvka (CSSD) shows this is not true, L N reports.
Lastuvka strongly disagreed when Jandak promised that the Czech Republic would ratify a treaty with the Vatican by the elections, to be held on June 2-3. "This was absolutely unrealistic. Jandak did not consult it with anybody. I can't understand how anybody could assume that the lower house would change its mind in this electoral period after it had rejected the ratification," Lastuvka said.
It was CSSD acting head Bohuslav Sobotka who had to correct Jandak´s statement about the ratification of the treaty with the Vatican, the paper says.
The Social Democrat senators were similarly shocked when Jandak said that the Senate seems useless to him. CSSD senator Alena Gajduskova said that she rebuked him on the first occasion. She said she believes that Jandak "won´t say anything like this anymore" after their talk. "I would be considering my statements about the Senate now," Jandak told LN.
However, nobody from the Social Democratic Party wants to openly face Jandak before the elections. "I told my reservations to the minister and the premier but I don't need to tell them to the media," Lastuvka said.
Bohuslav Sobotka did not comment on Jandak´s political style at all. He only said that he tries to achieve "more intensive communication" with Jandak who has "a broad range of opinions," the daily writes.
But Jandak told the paper that he is going to discuss his stances "same as he did before."
Jandak´s controversial statements and his sudden ideas do not harm his popularity among the Czechs, the paper says.
STEM polling agency head Jan Hartl said that the public positively reacts to Jandak´s individual performances, but is not very interested whether his ideas are implemented or not. "Most people just don't mind this," Hartl told LN.

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AUTOMOBILES

Skoda more than doubled earnings in 2005 

A nine per cent jump in car sales helped Skoda Auto more than double its 2005 pre-tax earnings to 10.1 billion crowns, the company reported recently. 
The Czech carmaker, a unit of Germany's Volkswagen, credited cost-cutting as well as higher demand for its Octavia model for the record profit. Revenues rose 14 per cent to 187 billion crowns, pushing last year's profit up 108 per cent from the 4.8 billion crowns posted in 2004. It was Skoda's second year in a row for a doubled profit margin. Global sales of the Octavia increased 28 per cent last year compared with 2004 to more than 233,000 units, the company said. 
Sales of the compact Fabia model fell four per cent to about 236,000 units, while sales were flat for the luxury car, Superb. 
Thanks to strong sales in Germany, Britain and Spain, Skoda said its sales in West Europe alone rose nearly 15 per cent last year. 
This year Skoda, the largest Czech company, plans to sell more than half a million cars for the first time, New Europe reported. 
The new Roomster saloon will be unveiled at the Geneva motor show and will reach European markets by summer, said board Chairman Detlef Wittig. 
While other global carmakers are cutting staff, Skoda has been expanding its Czech workforce. Global employment rose nearly eight per cent last year to 22,500 workers. 
Wittig said the company, which currently builds cars in India as well as Europe, wants to build more factories. 
"To secure a continuous growth of the company in coming years, significant attention will be paid to further expanding and development of new foreign assemblies in Russia and China, in particular," Wittig said. 

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ENERGY

CEZ to launch reconstruction of power plants 

Power company CEZ would start modernising its brown-coal fired power plants in two years at the earliest, and was considering building a wind farm and hydroelectric power plants in northern Bohemia, CEZ spokesman, Ladislav Kriz, said recently, New Europe reported.
The company would modernise the plants Tusimice II, Prunerov, Ledvice and Pocerady, according to Kriz. The first stage would be completed in 2030. The Tusimice I plant would be demolished. The Tusimice II and Prunerov plants "are most in need of reconstruction," according to Kriz. "Most of the power plants in northern Bohemia date from the late 1960s and early 1970s and their life span will end in 2010. The modernised plants will be able to operate for another 25 years," the spokesman emphasised. According to estimates by the experts, the coal deposits within the mining limits currently in force would be exhausted in 2054. The planned modernisation drive would involve an investment of 100 million Czech crowns which could involve another 50 billion crowns investment in construction of new plants "if the coal mining limits are lifted," Kriz asserted.

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TELECOMMUNICATIONS

Telefonica to merge Czech fixed-line, mobile units 

Spain's Telefonica has proposed the merger of its recently acquired Eurotel mobile and Cesky Telecom fixed-line phone companies in the Czech Republic. Pending shareholder approval, the new company, Telefonica O2 Czech Republic, would be launched with a new brand name by mid-year, said a Cesky Telecom statement. Merger costs were not disclosed, but according to Cesky Telecom CEO, Jaime Smith, quoted by the CTK news agency and cited by Deutsche Presse-Agentur (dpa), combining the companies would save 300 million Euro (US$358 million). Currently Eurotel is wholly owned by Cesky Telecom. Telefonica bought Cesky Telecom from the Czech government last year for about US$3.5 billion. The statement said the merger would lead to innovations such as new mobile-fixed products and services.

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TRANSPORT

Skanska to construct highway in Czech Republic 

A subsidiary of the Nordic construction firm Skanska, Skanska Czech Republic, signed a contract recently to construct a section of the D47 highway in the Czech Republic, a statement from the company revealed, which was later confirmed by the Czech authorities. The contract amount was estimated at approximately 3.33 billion Czech crowns. The Czech Road and Motorway Directorate issued the tender with the project being financed by government funds. The assignment was handed over for a 12-kilometre four-lane expressway section of the D47 at Ostrava in eastern Czech Republic. "The project includes an interchange, 10 highway bridges and eight other bridges. In addition, the project includes relocation of an adjacent railway line and about 10 kilometres of local and approach roads," according to the Skanska statement. Construction would also include noise protection walls and a number of flyovers for wild animals to cross, New Europe reported.
Preparatory work had reportedly already been started with the beginning of the construction work being scheduled for autumn. The approximate completion date was fixed for 2009. Skanska Czech Republic, which is the largest construction company in the Czech Republic, had sales of approximately 10 billion crowns in 2005, with about 7,000 employees. The company's largest projects in progress include expansion of the subway and rail systems in Prague, as well as the construction of a new head office for CSOB, a Czechbank. Skanska is one of the world's leading construction groups with expertise in construction, development of commercial and residential projects and public-private partnerships. The Group operates in selected home markets in Europe, in the US and Latin America with around 54,000 employees. Sales in 2005 totalled US$17 billion.

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