Politicians failed to come to an agreement on a package to cut next
year’s budget deficit on Thursday. After hours of debate, the Czech lower
house agreed to reconvene to discuss the proposals further on Friday
morning. Politicians handed in tens of proposals to amend the austerity
package, which would cut next year’s deficit by up to 60 billion crowns
(3.5 billion USD), the news website Novinky.cz reported after Thursday’s
parliamentary session drew to a close. At a meeting on Thursday morning,
the two main political parties failed to reach agree on a common stance to
the package. The Social Democrats said they would not support the
cost-cutting measures if family allowances and unemployment benefits were
lowered as proposed. The Civic Democrats, meanwhile, said that they were
against any further changes being made to the set of austerity measures.
Finance Minister Eduard Janota has warned that without the package, the budget deficit will reach 230 billion crowns (13.5 billion USD) next year, which, he says, will have dire financial consequences for the Czech Republic for years to come.
Leader of the newly-formed party TOP 09, Miroslav Kalousek, urged MPs to ‘shut up and support’ the deficit-cutting package proposed by Jan Fischer’s government in Parliament on Thursday afternoon. Mr Kalousek launched a scathing attack on those ‘egotists’ who, he said, ‘were holding the austerity package to ransom’. The Civic Democrats applauded Mr Kalousek’s speech, believing it to be targeted at the leader of the Social Democrats, Jiří Paroubek, who has said he will not support the package if a number of changes are not made to the bill. Mr Kalousek said that now that this series of cost-cutting measures had been drafted, the best thing that MPs could do for the Czech Republic was put aside their differences and support it.
Meanwhile, Czech Prime Minister Jan Fischer has linked his government’s future to the success of the deficit-cutting package. Speaking in the lower house on Thursday morning, the prime minister said that if politicians do not accept his cabinet’s set of proposed austerity measures, he will take it as a sign that MPs do not have confidence in his government. In his address to the lower house on Thursday morning, Mr Fischer said that the only changes he would be prepared to make to the austerity package would be those which enjoyed support from right across the political spectrum.
Czech President Václav Klaus has reacted to reports that he has been in negotiation with leader of the British Conservatives, David Cameron, about joint action which could scupper ratification of the EU’s Lisbon treaty. On Wednesday, British paper The Daily Mail reported that Mr Cameron had written to the Czech president asking him indirectly to postpone signing the EU reform document until after UK elections next year, following which the Conservatives have pledged to hold a referendum on the treaty. On Wednesday, the vehemently eurosceptic Mr Klaus confirmed that he had received a ‘purely personal’ letter from Mr Cameron in July, though the Czech president added that it would not influence his steps. Mr Klaus said he took the letter from the Conservative leader as proof the British Conservatives were ‘serious’ in their opposition to Lisbon. Mr Klaus has previously said that he wants to be the last head of state to put his signature to the document in Europe.
Three men were rushed to hospital in a critical condition in Zlín on Thursday morning, when a laid-off employee at a local printing company shot two of his former bosses. The man then shot himself. All three were taken to the town’s Tomáš Bat’a Hospital where, according to the Czech News Agency, the attacker died of his injuries. According to doctors at the institution, the other two men were shot in the head and remain in an extremely serious condition. Reports suggest that the attacker was recently made redundant at the GRASPO printing firm, where the incident took place.
In his speech to the UN general assembly on Wednesday, Czech President Václav Klaus said that it was world governments, and not world markets, which lead to the ongoing global economic crisis. In his speech, the Czech president also drew attention to the fact that it was 20 years ago that the Iron Curtain fell, and that in this short time, Central and Eastern European countries had managed to transform themselves into stable political democracies, running on the basis of free-market principles.
In business news, the Czech National Bank left interest rates unchanged on Thursday, as analysts had predicted. The key benchmark interest rate remains at 1.25 percent, bank spokesperson Marek Petruš said on Thursday morning. The last time the bank lowered interest rates was on August 6 this year, to 1.25 percent, which at the time constituted a record low for the Czech economy. Analysts are predicting that a slight rise in interest rates may come at the start of next year, as European markets begin to stabilize.
Around 100,000 people, including thousands of priests, are expected to turn out for mass served by Pope Benedict XVI in Brno on Sunday, Czech bishop Václav Malý told journalists on Thursday. The pope will start a three-day visit to the Czech Republic on Saturday. On his last day in the country, September 28, which is a state holiday in honor of the patron saint of the Czech Republic Saint Wenceslas, the pope is set to serve a mass in Stará Boleslav, where Wenceslas was slain, to another 50,000 people.
Czechs place the most trust in the country’s Constitutional Court, followed by President Václav Klaus and Prime Minister Jan Fischer’s caretaker cabinet, a poll conducted by the SANEP Agency and published on Thursday revealed. Two-fifths of respondents said they thought the court was the most trustworthy constitutional institution, with one-quarter saying they trusted President Vaclav Klaus the most and a further quarter placing their trust in Jan Fischer’s government. Only eight percent of Czechs said they believed in the Czech Parliament the most out of all constitutional institutions.
Leaders of the Czech political parties meeting with Finance Minister Eduard Janota have apparently agreed on modifications to the minister’s budget package. If effected, the changes will leave the 2010 budget with a slightly increased deficit, though it will remain below 170 billion. Prime Minister Jan Fischer has given that number as one of the conditions his interim government demands if the cabinet is to remain in place until elections. The breakthrough was reached largely through compromises with the left-wing parties that accepted their key parental subsidies issues while forcing them to give up on demands for progressive taxation. Following the Wednesday afternoon meeting most of the party leaders said the package would have their parties’ support provided any further changes remain at a cosmetic level. The budget committee has now recommended that Parliament approve the package and MPs are planning to deal with it on Thursday.
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