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EBRD sees need for further reforms in Czech Republic
Bank unveils new country strategy
After a period of slower growth the Czech economy has bounced back last year
with a growth rate of 4.4 per cent, the highest rate since 1996, and is
expected to grow at 5 per cent in 2005. To continue this positive trend
however, the Czech Republic still needs to implement a number of reforms, the
EBRD says.
In its new strategy for
the country, the EBRD identifies the following key challenges to enhance
the competitiveness of the Czech economy and to manage the country’s budget
deficit:
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Improving the business climate in regards to law enforcement, the granting of
licenses and permits, the adoption of a bankruptcy code and increased
transparency in awarding state contracts.
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Fiscal reforms that address shortcomings of the pension system, inefficiencies
in the health care system and the social safety net in order to reduce the
fiscal deficit.
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Better access to financial instruments such as equity capital for local small
and medium-sized enterprises should help to create new jobs and thus address
the continued high unemployment rate (8.3 per cent in 2004).
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Transport infrastructure needs further improvement and energy efficiency
remains a priority.
In accordance with this analysis the EBRD, which has already invested €1
billion in the Czech Republic, will focus its efforts on:
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Continue to work closely with local financial intermediaries to provide
funding to the SME sector and small municipalities, especially in rural areas;
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Provide equity and structured debt for local companies to support their growth
and regional expansion and support foreign direct investments by medium-sized
enterprises in regions of high unemployment
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Work on public-private partnerships in the infrastructure sector;
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Identify and fund energy savings and renewable energy projects.
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