The World Bank has said in a new analysis that the relaxed budget rules for the European Union's so-called Stability and Growth Pact will make it easier for new EU members like the Czech Republic, Slovakia, Poland and Hungary, to adopt the euro, the common European currency, by 2009. Previously, EU governments were obliged to keep budget deficits under 3 percent of GDP, and their debt ratio under 60 percent of GDP. Member states now have more leeway, which will help stimulate growth, said the World Bank, but the relaxed rules could mean governments will be slower to enact much-needed public-finance reforms.
Meanwhile, the Cabinet agreed this week on a tender for the purchase of over 230 armoured transport vehicles for close to $1 billion. The army is due to announce conditions for the tender this month, with bids due this year, and delivery to start in 2007. Mowag, Steyer-Daimler-Puch and Patria have reportedly already prepared initial bids.
The government also agreed to spend some $180 million to buy two large transport planes, two business jets and two helicopters - that will serve government officials, and transport personnel to foreign missions and to deliver humanitarian aid in crisis situations.
The Cabinet this week also approved a proposal aimed at reducing paperwork for businesses, as proposed by the Minister for Economic Affairs, Martin Jahn. Government agencies will be required to conduct an analysis by year's end as to how their rules may impose an unnecessary burden on businesses. Under the proposal, all new legislation will also include an analysis of the potential impact on businesses.
Commercial TV station operators, film distributors and cinema owners are up in arms over the government's plan to impose a 3 percent fee for every showing or performance of an audiovisual work, for copying audiovisual works, and for broadcasting commercials and "teleshopping". The idea is to raise revenue to support home-grown Czech filmmaking. If imposed, the fee could raise about $22 million a year. Representatives of the commercial stations TV Prima and TV Nova argue that they already support Czech films through co-productions and are lobbying heavily against the suggested fee.
Austria's leading operator of petrol stations, the company OMV, is in the process of buying Aral CR's network of 69 fueling stations, according to the Czech Business Weekly. The Dutch-owned Aral CR had announced in February it would exit the Czech Republic and is reportedly negotiating with Benzina, Shell, ConocoPhillips and Cepro, which operates Euroil stations.
Meanwhile, Karel Komarek, the owner of the Czech Business Weekly - and quite a bit else in this country - has transferred his $350 million or so in engineering assets to a Dutch holding company for tax and legal reasons, and said he may make future acquisitions through that new entity.