The government is expected on Wednesday to discuss a plan to trim the 2006 budget deficit to four percent of GDP, gross domestic product, with an eye toward meeting the Maastricht criteria in 2008 and adopting the EU currency, the Euro, before the end of the decade. Under the terms of the EU's "Stability and Growth Pact," governments cannot run a budget deficit greater than 3 per cent of GDP, nor can they have a debt ratio of more than 60 per cent of GDP. Thanks to taking on unusually high "one-off" loan guarantees, the Czech Republic last year posted a 12.9 per cent budget deficit as a percentage of GDP — the largest of any EU country. This year it is likely to be 6 per cent.
Social Democrat party leader Stanislav Gross is due to begin meeting with the heads of the other political parties this week — including the largely unreconstructed Communists — about forming a new government. On Wednesday he will the head of the main opposition Civic Democrats, Mirek Topolanek, and on Thursday, Gross is to hold talks with Communist party leader Miroslav Grebenicek. As the Social Democrat party leader and presumptive next Czech prime minister, Mr Gross has maintained that he will seek to build a cabinet without Communist support. For his part, Mr Grebenicek has said he hopes to influence the policy agenda but denied that the Communists were demanding the post of the Chamber of Deputies chairman in exchange for supporting the next government.
European Union finance ministers endorsed on Monday endorsed budget recommendations for the Czech Republic and five other new EU member states that broke the bloc's deficit cap last year. Under the terms of the European Union's "Stability and Growth Pact," governments cannot run a budget deficit greater than 3 per cent of GDP, nor can they have a debt ratio of more than 60 per cent of GDP. Thanks to taking on unusually high "one-off" loan guarantees, the Czech Republic last year posted a 12.9 per cent budget deficit as a percentage of GDP -- the largest of any EU country. This year it is likely to be 6 per cent.
The acting leader of the Social Democrats, Stanislav Gross, has announced
plans to meet with opposition party leaders on next week, to sound out
possible support for a new coalition government. On Saturday Mr Gross
contacted the leader of the Communist Party, Miroslav Grebenicek, to set a
meeting on Thursday; one day earlier he will meet with Miroslav Topolanek,
the leader of the right-of-centre Civic Democrats. Mr Gross was asked by
Czech president Vaclav Klaus on Friday to begin talks towards forming a
new coalition government. However, negotiations so far have shown it will
be difficult for Mr Gross to secure the 101 votes the new government will
need to clinch a mandate in the chamber of deputies. The outgoing
coalition government was based on the constellation of three parties
relying precisely on the thinnest of majorities.
Mr Gross has said he would still prefer solving the government crisis among the Social Democrats, the Christian Democrats, and the Freedom Union, the last of which can no longer count on support of all its deputies' club members.
Meanwhile, junior government members, the Christian Democrats, have already announced they will not sit in any cabinet relying on tacit support from the largely unreformed Communist Party.
The German news agency SID has chosen three Czech players to its list of all-stars from this year's European Football Championship - Euro 2004 - held in Portugal. The agency chose the names of Czech midfielders Karel Poborsky and Marek Jankulovski, and star striker Milan Baros - the most players from one national side - to grace the roster of its all star team.
Organisers of the 39th Karlovy Vary International film festival have announced they sold more than 43, 000 tickets to visitors in the festival's first two days. Along with the many visiting cinema fans, organisers have said that around 400 journalists have already arrived to cover the event and more are expected. Some 200 film professionals are also on site for the prestigious festival in the Czech spa town.
The head of the Christian Democratic Party, Miroslav Kalousek,
meanwhile, reacted to Mr Gross' announcement on Saturday by saying the
Christian Democrats would not sit in any cabinet relying on tacit
Communist Party support. However, he did say Mr Gross' intention to
meet with Communist leader Miroslav Grebenicek was legitimate. He added
he had not registered any signs Mr Gross was truly aiming for a
solution with the Communist Party. It is apparent the Christian
Democrats will tolerate not even so much as one communist MP vote.
Deliberations on forming a new government are expected to take some days and weeks, though Mr Kalousek refused to speculate on a final date. He said the quality of the new government took precedence.
The acting leader of the Social Democratic Party, Stanislav Gross, has
said he aims to discuss support for a new government with all
parliamentary factions, including the Communist Party. Following talks
within the Social Democrat leadership on Saturday Mr Gross said he would
address the head of the Communist Party, Mr Grebenicek, over the long
weekend; Monday and Tuesday are Czech holidays.
34-year-old Mr Gross, who was asked on Friday by the president to begin talks, still says, however, he will give priority to forming a new government along outgoing coalition lines - with the exception of the Freedom Union not sitting in the cabinet but tacitly supporting a minority government from the opposition.
Talks are continuing; negotiations, however, will not be easy.
Already it is clear Mr Gross cannot expect support from the Czech Republic's largest opposition party, the Civic Democrats, following a statement by their party leader Miroslav Topolanek on Friday.
The 39th Karlovy Vary International Film Festival gets underway on Friday evening. During the opening ceremony the American acting great Harvey Keitel will receive an award for his outstanding contribution to world cinema. The festival attracts many thousands of mostly young people to the west Bohemian spa town and continues until July 10.
President Vaclav Klaus has asked the acting leader of the Social
Democrats, Stanislav Gross, to begin talks on forming a new government. Mr
Gross is hoping to build a coalition with the same two centre-right
parties who were in government with the Social Democrats under his
predecessor Vladimir Spidla; he resigned last weekend in the wake of poor
results in elections to the European Parliament.
However, Mr Gross must find at least one extra vote to secure a majority in the Chamber of Deputies before the president will appoint him prime minister. The previous coalition had a majority of one in the 200-seat lower house, but one MP from the smallest party, the Freedom Union, has joined the opposition and another has announced he is going to follow suit.
In the meantime, a former member of the opposition Civic Democrats has allied himself with the Freedom Union.
Newspaper reports on Friday suggested that Mr Gross, who is 34, would try to win the support of MPs from the opposition benches in order to gain a majority.
Speaking to journalists on Friday, President Klaus said the new government should offer more than just the replacement of a few faces. He said the Czech people were expecting them to deliver change.