Books on Czech Republic
% of GDP
Update No: 111 - (25/08/06)
Persistent rain raises water levels
The Czech Republic suffers from persistent flooding in summer. This year has
been no exception.
Persistent rain in early August raised rivers levels around the country. The
most affected regions were southern and northern Bohemia. As meteorologists
warned of more rain, children at various summer camps were being evacuated and
some areas were on the highest degree of flood alert. Some roads around the
River Elbe were also closed to traffic as the river continues to swell.
Prime Minister Paroubek hoping to turn outgoing cabinet into new government
There is a political as well as climactic crisis in the country after elections
to parliament in June, which were inconclusive. New elections may have to be
Outgoing Prime Minister and Social Democrat leader Jiri Paroubek, premier since
April last year, has confirmed that the make-up of his cabinet could change if
the latest, seventh attempt at electing a new lower house speaker fails. The
outgoing cabinet contains ministers of the Freedom Union, which did not make it
into parliament in the June elections. With important decision-making ahead,
such as next year's state budget, these ministers could be replaced. Paroubek
has also hinted that his new cabinet could be the country's next new government.
Three months after the parliamentary elections, the country has neither a new
government nor a new lower house chairman. The 200 seats in the lower house of
Parliament are evenly split between the left and the centre and right parties.
Civic Democrat leadership rejects "reconstruction" of outgoing
cabinet; calls for new elections
Meanwhile, the Civic Democrat leadership in mid-August said it rejects what it
called the Social Democrats' planned reconstruction of the outgoing cabinet and
called it disrespectful of the democratic elections held two months previously.
The leadership also ruled out any form of coalition, including a Grand
Coalition, with the Social Democrats.
If its plans to form a minority Civic Democrat government should fail, the party
leadership supports a temporary caretaker government that would prepare the
country for early elections. This is readily understandable, given recent poll
Poll: Civic Democrats enjoying rise in popularity
If elections were held again, the Civic Democrats would likely win, with 41 per
cent of the vote in mid-August, suggested a new opinion poll then. In the
parliamentary elections in June, the party won 35.5 per cent of support.
The other parties would get around the same number of votes as in June,
according to the poll conducted by Factum Invenio. The agency attributes the
Civic Democrats' dramatic rise in popularity to its efforts in the post-election
Czech participation in US anti-missile programme almost certain, says
The Czech foreign minister, Cyril Svoboda, says it is almost certain that
the USA will ask the Czech Republic to join its anti-missile defence programme.
Speaking on Czech TV in mid-August, Svoboda said that could involve the
stationing of radars and the building of an anti-missile site with around ten
missiles. A team of US experts has already surveyed sites in the Czech Republic.
In the same televised debate, Svoboda also said the Czech Republic will not take
part in an international military presence in Lebanon.
Controversial businesswoman hoping to run for post of senator
Controversial Czech businesswoman Libuse Bartova intends to run for the post
of senator. Ms Barkova was sentenced to five years in prison for insurance fraud
last year after making false property damage claims following the floods in
2002. Ms Barkova has appealed the verdict.
She also made headlines in 2003 when her conversations with then Interior
Minister Stanislav Gross and a Defence Minister were caught up in a police
wiretap, and it was revealed that Ms Barkova owned a building housing a brothel.
In an interview for the commercial radio station Frekvence 1 on August 14th, Ms
Barkova said she would stand in the Senate elections as an independent
Toyota Peugeot plant's loss near US$100m
Automakers Toyota and Peugeot Citroen lost nearly US$100 million during the
first year of operations at their joint-venture plant in the Czech Republic, New
A 2005 loss of 2.2 billion crowns (US$98 million) on a turnover of 21 billion
crowns was reported in the Prague newspaper Mlada fronta Dnes based on a
soon-to-be-published Top Press survey of major Czech companies.
In March, TPCA said it posted 18 billion crowns in sales and built 103,819 cars
last year after the factory - Toyota's first assembly plant in Eastern Europe -
was launched in February. This year, the plant, 40 kilometres east of Prague,
plans to build 300,000 small cars for the European market. When asked by the
newspaper about last year's earnings, which were not officially released, TPCA
President Yasuhiro Takahashi said the plant's production reached one-third of
capacity "so we also had one-third of the income."
FOOD & DRINK
Fruit, vegetables consumption on the rise
According to Czech Statistical Office data, the consumption of fruit and
vegetables has been rising in the Czech Republic, growing from 72.7 kilos of
fruit and 74.2 kilos of vegetables a year in 1993 to 83.8 and 79.8 kilos,
respectively, in 2004, www.freshplaza.com reported. Household spending on fresh
fruit and vegetables has also been on the rise, and last year each member of an
average household spent 1,215 crowns on fresh fruit, four times more than in
1989. The spending on fresh vegetables and potatoes has increased to 1,310
crowns per member of an average household in 2005 from 203 crowns in 1989.
According to ACNielsen, some 40 per cent of Czechs buy fruit and vegetables in
supermarkets, 27 per cent in hypermarkets and 20 per cent in specialised shops.
IT sales reach US$1.15 billion
IDC analysts recently said that Czech suppliers of IT services raised sales by
15.3 per cent year-on-year to US$1.15 billion in 2005, website praguemonitor.com
In crowns, the growth was about 50 per cent slower, owing to the crown's gains
to the dollar. The increase was pulled by foreign investment, a strong
development of the production sector, new professional centres and an inflow of
EU money. In this regard, IDC said demand supported in this way could last in
the years to come, and added it expected the Czech market to grow by some 10 per
cent on average in the next five years. Services linked to the installation of
computer devices, software support and system integration generated the highest
sales last year, making up 42 per cent of the total volume. Companies in the
banking sector invested the highest sums in IT. Large international players IBM,
HP, LogicaCMG, Accenture and SAP made up almost 25 per cent of the market.
Japan is 2nd biggest foreign investor
The Czech branch of Hitachi plans to build a 2.5bn crown plant to produce TV
sets in the Triangle industrial park near Zatec, north-western Bohemia,
www.praguemonitor.com reported. The plant would employ roughly 2,000 people.
Japan is the second largest foreign investor in the Czech Republic, trailing
Germany, according to CzechInvest. In 2003, Denso also launched the production
of car air-conditioning units in the industrial zone in Liberec, northern
Bohemia. The company's investment amounted to US$255m (around 5.6 billion
crowns). TCPA, a grouping of Japan's Toyota Motor Corporation and France's PSA
Peugeot Citroen, built a car plant in Kolin, central Bohemia. TPCA's investment
reached 1.3bn Euro (around 40bn crowns), of which about half went into the
development of a new car model. The plant, with an annual capacity of 300,000
cars, is the biggest investment made by a Japanese company in the Czech