The Czech caretaker government on Monday unanimously backed a cost-saving and tax-raising budget proposal for 2010 tabled by Finance Minister Eduard Janota. Mr Janota’s package is seeking to limit next year’s deficit to 155.3 billion crowns instead of the record 230 billion deficit the country is now heading for. Prime Minister Jan Fischer has made acceptance of a budget with the deficit capped at 170 billion crowns a condition of his staying on in office after the abandonment of autumn elections. Mr Janota’s has presented his package as a more or less equal mix of spending cuts and tax rises. It includes rises in Value Added Tax and social insurance payments, cuts in social spending and a 4.0 percent cut in public service wages and for politicians and judges. Leaders of politician parties are due to continue talks on the budget on Tuesday and Wednesday with the lower house expected to weigh in on Thursday.
The Finance Minister’s proposed budget package was described on Monday by the country’s biggest grouping of trades unions as an acceptable compromise. The unions were meeting with employers and the government for regular three-way discussions. The chairman of the Czech and Moravian Confederation of Trades Unions, Milan Štěch, said unions still had reservations about a proposed 4.0 percent cut in public sector wages and cuts in payments to new-born children and child support.
On the other hand, the Social Democrats said on Monday that they will table their own budget proposal in which the deficit does not exceed 155 billion crowns. The Social Democrats say they can arrive at this figure without increased VAT or cuts in payments to families with children. They propose higher company taxes and more progressive taxation of individuals to raise cash for the state coffers.
Czech Foreign Minister Jan Kohout is due to meet with his US counterpart Hillary Clinton on Monday. Discussions on the margins of the UN General Assembly meeting are expected to centre on the US decision last week not to go ahead with its original missile defence plans in the Czech Republic and Poland. In June of last year the Czech and US governments signed an agreement for the Czech Republic to host an anti-missile radar which would have been twinned with interceptor missiles in Poland. Mrs Clinton said on Friday that the two countries are frontrunners for a mobile missile defence system which the US would now like to roll-out in Europe.
A war of words has broken out between Social Democrat leader and former prime minister Jiři Paroubek and ex-president Václav Havel. Mr Paroubek started the row in a newspaper article by listing the former dissident and architect of the Velvet Revolution as among a series of leaders harking back to the Iron Curtain era. Havel responded by describing Mr Paroubek’s comments as lies. On Monday, the Social Democrat leader shot back in a letter in the daily Pravo sticking to his ground and saying Havel was one of those who was trying to block cooperation between the US, NATO and Russia. He said this was now being pushed by Washington.
The European Commission has hinted it will propose retaliatory steps against Canada if it does not lift the visa requirement for Czech imposed in the summer. Czech Deputy Interior Minister Lenka Ptáčková Melicharová said that was the stance outlined during a meeting of EU interior ministers in Brussels on Monday. The Commission could, she said, call for the EU to introduce visas for all Canadian diplomats travelling to the 27-strong grouping of countries. Other countries suggested unspecified economic steps could be taken to put pressure on Canada, she added.
The country’s biggest steelmaker, ArcelorMittal Ostrava, is planning to re-launch production at its third foundry according to media reports. The third foundry was closed and another two have been working at a fraction of their normal capacity after the company was hard hit by the global economic crisis and sharp downturn in demand. The business daily E15 said the steelmaker now had sufficient orders to work at around 60-75 percent of normal capacity which would involve bringing the mothballed foundry back into production from the start of 2010.
Minister of the Interior Martin Pecina says the caretaker government should come up with a package of anti-corruption measures. Mr Pecina said measures that could be tabled include an offer of immunity or lower sentences for state witnesses in corruption cases and the use of agent provacateurs to help uncover corruption. Corruption is still a major problem according to a report by the team of government economic advisers, NERV. It pointed out recently that state engineering and infrastructure contracts are far more expensive that in West European countries because corruption was built into the construction price.
The Czech men's tennis team has climbed to fourth place in the world rankings following its weekend semi-final Davis Cup Victory over Croatia. That represents a jump of three places from its previous seventh place. The 4-1 victory against Croatia booked them a place in December’s Davis Cup final against Spain. The higher ranking from the International Tennis Federation will help the Czechs avoid top teams when the draw for next year’s Davis Cup is made on Wednesday.
The Czech news agency, ČTK, has reported that the Czech Foreign Minister
Jan Kohout will meet for talks with US Secretary of State Hillary Clinton
on Monday. Mr Kohout will be in New York ahead of the 64th session of the
General Assembly of the United Nations. It is not known what topics will be
on the agenda in the meeting with Mrs Clinton but there is speculation they
could include possible Czech cooperation on US missile defence. On Friday,
Mrs Clinton said that the Czech Republic and Poland were key candidates for
the placement of new mobile anti-rocket missiles planned by the US - a
system which will replace a proposed radar base in the Czech Republic and
rocket installation in Poland. The earlier missile defence plans were
scrapped by the US this week.
In related news, the Czech delegation travelling to the US for the UN Generally Assembly session leaves on Sunday, headed by Czech President Václav Klaus.