Ice age

Written by: Philippe Riboton

ACCORDING TO data released sometime in March, of the four Visegrád countries, the Czech Republic recorded economic growth in 2004 of a mere 4%. Sure, this is better than some Western economies that grew by 1-2%, but it’s clearly behind the performance of Slovakia, which had the highest growth at 5.5%, and Poland (almost 5.4%). So now the real question is: will this year produce better results? Unfortunately, there is no real reason to believe it will. None of the most significant transformations that were promised by the current government have been implemented so far. Nothing on the bankruptcy issue, nothing on the commercial registry side, nothing on the pension front – to name just three areas that were often used to illustrate how things would be improved. At the same time, the Czech Republic is slowly but surely strengthening its position on the podium of European countries offering the highest taxation rates (for both income and social tax), having reached the level of Finland, and even surpassing Denmark. Add to that the current political crisis surrounding the accommodation saga of the prime minister and the near future looks like nothing less than an ice age. Meaning that, almost certainly, nothing will really be decided until elections take place and a new government with a strong majority in Parliament passes the measures that are so dearly needed to improve the current climate. At the end of the day, all the great intentions expressed by our current state leaders will remain empty talk with no effect. And the risk is that the country will have lost not only precious time in its transformation program, but also a competitive advantage versus its neighbors for making this market a better place to do business and a progressive place to invest money. At least one year will have vanished in worthless promises, while a few people in power – one in particular – will have pampered their own selfish interests, forgetting that they had been trusted with a job to promote the public welfare.