Written by: Martin Zika
INDUSTRY: Fewer tourists in the
According to information from the Czech Bureau of Statistics, 47,471,000
tourists came to this country in the first half of this year. Last
year this figure was 47,661,646 for the same period. This is reflected
in lower profits for hotels and stores that specialize in souvenirs.
Experts agree that the main reason for this is the strengthening
of the Czech crown against the euro. Moreover, the Czech travel
industry was also significantly affected by the recent floods. According
to Jaromír Beránek of Mag Consulting, a company active in this field,
a 50-70% decline in the occupancy rate of accomodation capacities
could be expected in September. "Thousands of entrepreneurs
in the travel sector will literally fight for survival," Beránek
says. According to him, the Minister of Foreign Affairs should explain
to foreign ambassadors that we have coped with the floods and are
once again a safe destination.
ECONOMICS: Floods force shift
The catastrophic floods that ravaged the Czech Republic and caused
damages in the tens of billions (CZK) will significantly influence
the future of the economy (see page 28). Today, the renovation of
the ravaged country has become the highest priority of the government
for the next year and investments planned before the flood will
have to be postponed. The state is prepared to pay for most of the
damages and the government has already published proposals for financing
the repairs. The state budget will be reworked but the planned deficit
will not increase, according to Minister of Finance Bohuslav Sobotka.
Sources will be sought in the budgets of the ministries, the purchase
of new supersonic jets will not be realized (buying used jets has
been proposed), and exceptional income from privatization will be
used. The state will contribute by subsidizing the interest on bank
loans for affected entrepreneurs, and acting as guarantor for loans
and leasing to small and mid-sized firms. Foreign assistance, both
humanitarian and in the form of various loans, has also been offered
to the Czech Republic.
ADVERTISING: The bell tolls for
The new Czech government successfully passed its first test on August
7, when the parliament expressed confidence in it. Now it has also
passed a bill regarding a complete ban on tobacco advertising. This
bill relates to sponsorship that promotes tobacco products, as well
as their free promotional distribution. Advertising that does not
directly mention tobacco products, but uses the trademark, logo
or characteristic features of the product, will also be prohibited.
According to this amendment to the advertising law, the promotion
of tobacco will only be allowed in shops that sell cigarettes and
in large stores, particularly in those parts where tobacco is sold.
Another exception might be advertisements in specialty magazines.
The proposal will be negotiated in both chambers of parliament,
and the House of Representatives will most likely deal with this
bill during its October session.