Czech koruna heavy burden for companies

Siemens has announced plans to close down its plant in Prague, as a result of which more than 1000 jobs will be lost. The liberal daily Mladá fronta DNES fears that Siemens will not be the only company to take such measures: "Even the closure of such a major company will not endanger the Czech economy, and the workers will find new jobs in Prague or elsewhere. Nonetheless, it will be difficult to attract new companies if the big firms start packing their bags and leaving." According to the newspaper the main reason for the exodus is the extremely strong Czech koruna. "Foreign firms that calculate in euros or dollars have seen their wage and salary costs rise by up to 40 percent owing to the [current strength of the] koruna. In this kind of environment only few would hesitate to make a move. It could also hit firms that under other circumstances would stay in the Czech Republic and prosper for years to come."

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