The Czech Competitiveness Council is a platform for debating competitiveness, economic policy and promoting solutions across all sectors, public and private.

Spotlight Issue

Economic Policy: EU's and Czech population ageing fast

22 July 2015

Currently available data on fertility released by the Czech Ministry of Health show there are around 43 newborns per 1,000 women. This is a significant fall compared with 1990 and the trend is ever stronger. "We are producing more and more things and less and less children," demographer Tomáš Fiala says. Find out more on current demographic and related economic and political challenges in an interview with demographer at the University of Economics in Prague Tomáš Fiala (Čechů se rodí stále méně - Less and less newborn Czechs) and in an interview with egyptologist professor Miroslav Bárta.

During the period from 2014 to 2080 the share of the population of working age is expected to decline steadily through until 2050 before stabilising somewhat, while older persons will likely account for an increasing share of the total population: those aged 65 years or over will account for 28.7 % of the EU-28’s population by 2080, compared with 18.5 % in 2014. As a result of the population movement between age groups, the EU-28’s old-age dependency ratio is projected to almost double from 28.1 % in 2014 to 51.0 % by 2080. The total age dependency ratio is projected to rise from 51.8 % in 2014 to 77.9 % by 2080. Read more in the Eurostat latest Population structure and aging statistics.


Competitiveness: ECB criticizes lack of convergence in the eurozone

02 August 2015

The eurozone´s central bank last week used an unusually strong wording to assess the convergence progress among member states of the monetary bloc. According to the central bankers, early adopters of the euro (the original 11 members plus Greece, which joined them in 2001, before the introduction of euro coins and banknotes) show disappointing levels of convergence. The bank was especially harsh towards Southern countries, especially Greece and Italy. Southern members benefitted largely from the short-term effects of the newly-nascent eurozone in terms of borrowing costs, but failed to profit from these to introduce structural reforms. Economies in the south remain rigid and protectionistic and, in the cases of Greece and Italy, even show divergence from their higher-income monetary union partners. Spain and Portugal seem to not have moved from their relative position vis-a-vis the Northern countries. In contrast, though, some of the new eurozone countries (Estonia, Latvia, Lithuania and Slovakia), show the highest levels of convergence inside the monetary bloc.

This ECB publication follows a high-level plan to finish the monetary union proposed by the 5 EU presidents and some proposals of other high-level figures to take a further step ahead in fiscal integration in the eurozone.

For more, click here.


Politics: Greece manages to stay in the euro

26 July 2015

Early in the morning on Monday 13 July, following an all-night Euro Summit as well as a reduced-format negotiation with the German Chancellor Merkel, Greek Prime Minister Alexis Tsipras seems to have saved his country´s place in the euro. Despite the fatalistic mood after the 11 July´s Eurogroup, which failed to agree even on a closing statement, the heads of state and government of the euro area found a way to keep Greece afloat. As expected, Greece asked for a brand-new bailout program from the ESM - to help it meet its financial obligations and, also as expected, proposed far-reaching reforms – tougher than the ones Greek voters rejected in the controversial referendum. The Euro Summit agreed in principle to open new bailout talks, but only once Greece adopts a list of reforms – some by Wednesday 15 July, while others by Wednesday 22 July. These reforms include VAT system overhaul (including higher VAT in tourism services), pensions reform, strict independence of Greek statistics bureau and the beginning of public administration depolitisation. These ex ante measures, agreed on by the Greek government, illustrate how trust has eroded in the past months between Greece and the rest of the eurozone. It was also made clear that since the financial situation of Greece became much worse in the past weeks, not least due to capital controls, reforms in the new program (a third one for Greece) would have to be stricter than anticipated. The eurozone also asked, and Greece agreed, to include a separate IMF program since March 2016. The new ESM program is expected to be worth more than €80 bn, excluding up to €25 bn for bank recapitalization.

As part of the future bailout deal, there will be established an independent privatisation fund in Greece, worth some €50 bn. Greek state assets will be transferred to the fund, which will in turn monetize them, using the revenues for bank recapitalization, debt reduction and investment. This is regarded as the most controversial issue - it was agreed among the last ones.

In the following days, the Greek parliament passed both waves of ex ante reforms and negotiations on the program were launched. Several eurozone parliaments, including the German Bundestag, voted on the issue. These parliamentary votes showed the splits in several ruling parties – the Greek SYRIZA party was hopelessly split on the issue and the reforms passed in the parliament only thanks to the opposition. What followed was a government reshuffle by PM Tsipras. In Germany, some 40 lawmakers from Ms Merkel´s CDU, and from the Bavarian sister party CSU, opposed the talks – embarrassing the chancellor.

The ECB eased the conditions for emergency liquidity assistance for Greek banks, which allowed them to open last week, although capital controls remain in place. The Council of the EU also approved a bridge-loan for Greece worth €7 bn from the Commission-administered EFSM, allowing Greece to repay both the IMF and the ECB. Much will now depend on whether the new bailout talks can be finalized successfully and if the Greek government is able to pass the tough reforms it pledges to adopt. But the immediate danger of a Grexit, dangerously close 2 weeks ago (not least because of German finance minister Schauble´s proposals for a euro time-out for Greece), seems now to be averted.

For more, click here, here, here and here.


Competitiveness: VIDEO: Red Dot Award for Czech industrial design

21 July 2015

Czech industrial designer Martin Tvarůžek and his colleagues were awarded for the product design of milling and boring machine for Hestego, a.s. The RED DOT AWARD 2015 ceremony took place in Essen, Germany on 7 July 2015. The red dot award celebrates 60th anniversary in 2015. Read more about the winning product design. View an interview in Czech with Mr.Tvarůžek on DVTV.


AmCham Policy Report, Issue 6 - July 2015

13 July 2015

Who wins the bid for operating the government’s highway toll system will determine more than just which company will get a big boost to its revenues. How the process is handled may decide the longevity of this government, and will certainly influence how long Minister of Transport Dan Tok stays in his position...

Read the July issue of the policy report of the American Chamber of Commerce in the Czech Republic.


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