Unions say Czech economy will overcome stagnation only in 2016


21.01.2014 12:57

Prague - Unions say that the Czech economy will not overcome stagnation earlier than in 2016 and trade union umbrella CMKOS does not expect a major revival earlier, it puts GDP growth for this year at up to one percent, trade union economists told journalists today.


Strojírny Wikov MGI, výroba - ilustrační foto ČTK Taneček David

They blame mainly former government of prime minister Petr Necas and its austerity measures for the situation.

The CMKOS is the biggest trade union centre in the country. It groups together 29 trade union associations with some 370,000 members. This year it wants to focus on pushing through measures for boosting the economy and raising employment.

"This year can be a year of stabilisation of stagnation at best, but certainly not a year of growth," said the unions´ macroeconomist Jaroslav Ungerman.

The unions note that while the neighbouring countries are beginning to recover from the crisis, the situation in the Czech Republic is not improving and the number of unemployed is rising. The country has been in recession for six years.

Trade union macroeconomist Martin Fassmann said that the Czech Republic was paying an enormous price for the cuts and lowering of the budget deficit in the past years.

Unemployment grows, getting near the 600,000 level, and the number of people on the poverty threshold is rising, he added.

"Problems continue. We are very concerned that the economic trend cannot be changed overnight. It will have unfavourable consequences for this year and next year," Fassmann said.

Even when this year´s budget counts on a bit higher expenditures for investments, trade union economists claim that it will not be enough for starting economic growth.

The Czech economy is pulled by exports but consumption needs to be raised, say CMKOS analysts.

The unions call on the new government that, when it comes to power, it creates a "realistic programme" for where the Czech economy should be heading. The start of growth will depend on whether the cabinet finds money for the measures and how fast it will implement them.

Trade union leaders believe that bargaining with the new government will be easier than in the past. For this year, they want to contribute mainly to the adoption of measures to support employment and economic growth.

Negotiations will also concern raising of the minimum wage. The unions also plan to supervise how the new government will meet their five main demands, among them the abolition of the Necas government´s reforms and fight against tax evasions.

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