Ukrainians could help the Czech economy. But Šichtařová does not believe that this government will fail


Is Petr Fiala doing well as Prime Minister?

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In response to annual US consumer price inflation of 7.9% in February, the highest since January 1982, the US Federal Reserve raised its policy rate by a quarter of a percentage point between 0. 25 and 0.50%. At the same time, it has worsened the estimate of growth for the US economy for this year to 2.8% from the 4% previously expected. How will this development of the strongest economy affect the rest of the world, and is it enough of a measure as the Fed plans to raise interest rates a total of seven times this year?

The impact on the world will be primarily through stock prices, followed by a number of other minority effects.

The fact is that with the increase in interest rates is accompanied by the fact that in about three weeks the US Federal Reserve will begin to withdraw money that it has already injected in the process, commonly known as “money printing “. So it is precisely this “printed” money that the US Federal Reserve will now pull out of circulation, and this will make money more expensive through higher interest rates, so it won’t be so easy to get a loan and get more money in circulation.

It’s clearly good for high inflation in the US, in fact it was too late yesterday, but at the same time it’s a blow for stocks and other securities, whose prices have been screwed up in recent years with just this cheap money. Basically, we’ve seen inflationary stock price inflation over the past few years. Securities will therefore lose their engine of growth. And because global stocks mostly react to US stocks, the stocks losing their power aren’t just in the US.

We will always stay with the central banks. In an interview with Seznam Zprávy, the Governor of the Czech Republic, Jiří Rusnok, said that inflation in the Czech Republic could reach a level of around 13 and 14%, and its reduction would not be possible until next year. . But he added that was his personal estimate. What do you think of his prediction and what does a private estimate mean when an authority such as the Governor of the CNB is undoubtedly telling the media publicly?

I agree with that. And I see that the estimate is quite bold, although true in my opinion, so that in order for the governor to present such a bold estimate on behalf of the central bank, he would have to have a new official central bank inflation forecast . But it doesn’t exist yet, so the only thing the Governor can do is say it for himself. And it’s a good thing he says that, because it was hugely embarrassing and counterproductive when ECB chief Lagarde stubbornly argued over the past year on behalf of the ECB that the Inflation in the euro zone increases only temporarily and only “slightly”.

At the same time, inflation has reached decades in the whole of the European Union, including the euro zone. It was 6.2% in February. It would therefore make sense for the European Central Bank to respond to the same situation as the Czech National Bank or the Fed or the British Central Bank – by raising interest rates and withdrawing money. Instead, however, the ECB has once again demonstrated that it is a central bank in name only and that it is merely a political office instead of an economic institution.

ECB President Christine Lagarde repeated many empty words this week, such as that “any increase in the key rate will be gradual” and that the ECB “may introduce new instruments”. In short, the same nonsense, but no action. Not only has the ECB completely resigned to inflation, it is actually inflating inflation by continuing to print money, buying government bonds such as Italy, and further monetizing sovereign debt. , thus fulfilling a political task and not an economic objective of guaranteeing price stability.

On the other hand, it is good that the CNB is leading the way.

The refugee crisis linked to the Russian invasion of Ukraine will last longer and will therefore have an impact on the quality of life in the Czech Republic. Regional Development Minister and Pirate Party Chairman Ivan Bartoš said this in Brussels on Thursday. What should the public be prepared for in the face of reduced quality of life, when the current number of 270,000 war refugees from Ukraine to the Czech Republic is far from definitive?

Much depends on how the Czech government reacts to this. It can be an economic disaster for us, as well as an economic blessing.

It would be an economic disaster if we left all newcomers with us on welfare, gave them free housing and essentially fed them as local tax food.

It would be an economic blessing if we treated the market for these newcomers: give them basic asylum for the first three months before they find a job, but after that period we will treat them like any other unemployed. That is to say, they will have to rent and pay for accommodation, they will have to live from their work. If they were approached in this way, the labor market, long burned in our country, would absorb these newcomers like a sponge. The language barrier isn’t a big deal, as it’s a Slavic language and with a bit of effort it’s possible to learn Czech fairly quickly freight-wise.

If the government takes it intelligently, it could help the Czech economy enormously. But somehow I don’t trust the government that it won’t work.

  • pirate
  • Deputy Prime Minister in charge of digitization
  • Vice Prime Minister

According to current Eurostat data, Czechia is the country with the lowest unemployment rate, but at the same time it has the largest supply of job vacancies, which is almost double compared to the whole of the EU. What is the cause of our long-standing unshakeable first place among European countries?

It is caused by a completely stupid, counterproductive and fundamentally harmful antivirus program and all the other programs that have more or less followed it. Quite simply, at a time when the Czech economy had a historic opportunity to go through a cleaning crisis and accompany the recession with the recovery of the labor market, we paid people not to work and we preserved the obsolete structure of the economy. That is why today Ukrainians could be a great help for the Czech labor market, if we approach them wisely, that is, the market.

In connection with the difficulties of Škoda Auto due to the war in Ukraine, I was interested in the information that the company increased its operating profit by 43.2% to 1.08 billion euros (26 8 billion crowns) last year, despite falling car sales. More so, the fact that automaker Mladá Boleslav was the biggest beneficiary of support from the government’s antivirus program last year. At the time of the epidemic, the state paid him more than 1.33 billion crowns in salary. Was such a thing really necessary, considering the profit?

No, it was not necessary, or we have to perceive it as the fact that Škoda’s profit is, among other things, precisely because the state poured its money through Antivirus. The money that the state took away from other taxpayers, who stifled small traders, whose small restaurants and businesses went bankrupt during covid, watered the Skoda and helped it make a record profit. The state simply redistributed. At least in legend, Robin Hood stole from the rich and gave to the poor, not that he was a thief and a slightly smaller thief. But the Czech government stole from the poor and gave even more to the rich. This is the true essence of government redistribution, like Antivirus! That’s why I’ve always said: Stop these artificial programs, it’s more or less a scam for voters who believe it saves the economy. But redistribution cannot save anything!

  • TOP 09
  • Vice Prime Minister

“Now it is crucial that everyone gets a third dose if five months have passed. The reason is medical, but people can’t go on vacation without it either. He won’t leave the Czech Republic without vaccines” , said Health Minister Vlastimil Válek and inadvertently recalled the period when it was also impossible to leave the republic Are we losing freedom, as the signatories of the recently created Charter 2022 believe, or is the TOP 09 Deputy Prime Minister taking care of us in our best interests?

Let Mr. Valek take care of his own health and get the benefits he wants. Let them give people the freedom to decide how many benefits and what form of health care they will choose again. In the last two years Covid has more or less turned into a common cold, as we’ve been expecting for two years, because that’s just how respiratory pandemics behave, so the third dose for people who are not at risk is just a charade.

Retreat with full pockets or future unveiled

Vladimír Pikora and Marketa Šichtařová

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author: Jiří Hronik

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