Next year’s state budget deficit could be as low as 157 billion crowns if the draft package of austerity measures is approved in its present form, Finance Minister Eduard Janota told the ctk news agency after negotiations with political parties' representatives on Friday. The revised package provides for an increase in both VAT rates by one percentage point. It will reportedly save 12 billion crowns in social and mandatory spending on the side of expenditures. The cost-cutting measures would only apply for 2010. The government is to discuss and approve the package on Monday. Political leaders will be debating the proposed cuts further. After two attempts at early elections were scupperd Prime Minister Jan Fischer made it clear that his caretaker government will only remain in office if politicians agreed on a budget with a maximum deficit of 170 billion crowns i.e. 5 percent of the GDP.
Economic analysts have welcomed the latest version of the government’s austerity package calling it the best possible compromise. There is general consensus that the savings plan is acceptable for businesses. UniCredit Bank analyst Pavel Sobisek told the CTK news agency the changes made showed that the finance minister was listening to the signals coming from individual political parties and working hard to find common ground.
Defense Minister Martin Barták is holding talks with US officials on new areas of cooperation after Washington abandoned plans to build a radar base in the Czech Republic. Minister Barták is expected to meet with his US counterpart Robert Gates later today to discuss the implications of the change of plan and the possibility of maintaining agreed on science and research projects. Czech Foreign Minister Jan Kohout on Thursday also emphasized the country’s interest in cooperating closely in some other sphere of activity, for instance space research.
Former Czech president Vaclav Havel on Friday expressed regret over Washington’s decision to abandon the missile defense project in central Europe. He said he had considered it a certain form of protection against Russia’s attempts to regain influence in a region it still considered as its backyard. Several politicians from central and eastern Europe, including Mr. Havel, wrote an open letter to President Obama earlier this year warning him about Russia's growing ambitions and expressing fears that the United States was abandoning the region.
A group of right-wing senators have announced they will file a new constitutional complaint against the Lisbon treaty on September 29th. Senator Jiri Oberfalzer of the Civic Democrats said the group was petitioning the Constitutional Court to assess the treaty’s compliance with the Czech constitutional order. The complaint is likely to further delay the treaty’s ratification. Parts of the treaty came under the court’s scrutiny last year following a similar complaint by senators, but the court then ruled that the respective passages were in line with the Czech Constitution.
At a press briefing in Brussels on Thursday night Slovak Prime Minister Robert Fico warned Prague it was undermining its position in the EU by delaying the ratification of the Lisbon treaty. Following a summit of EU leaders on Thursday, Mr. Fico said he had heard a number of very strong statements on the subject by prime ministers of leading EU member states. The Czech prime minister, Jan Fischer, later confirmed that there was increasing concern in Brussels on the subject, and that EU leaders were now more worried about the Eurosceptic Czech president signing the treaty that they were about the outcome of the Irish referendum.
The Lisbon treaty has been ratified by both houses of the Czech Parliament, but President Václav Klaus has made it clear he will delay signing it for as long as possible.
An opinion poll conducted by the Factum Invenio agency in the beginning of September suggests that the Social Democrats would now win general elections with 32.6 percent of the vote followed by the right-wing Civic Democrats with 27.2 percent. The Communist Party would get 13.8 percent of the vote while the newly formed TOP O9 would get 11.9 percent. No other party would gain enough to cross the 5 percent threshold needed to win seats in the lower house.
The Czech economy will contract by more than 2.7 percent and less than 5 percent this year, according to figures published by the Czech Finance Ministry on Friday. Outlooks for 2010 suggest a growth of 0.7 percent on average. A significant acceleration is only expected in 2011 - 2012 when the economy should grow by 2.5 percent and 3.4 percent, respectively.
The Czech champions Slavia Prague were beaten away 2:0 by Genoa in their opening game of the group stage of football’s Europa League on Thursday evening. Slavia conceded for the first time after four minutes and found no way back after the Italians went 2:0 up just inside the half hour mark. Sparta, meanwhile, were leading Eindhoven 2:1 with only minutes remaining when they conceded a penalty, allowing the Dutch side to leave Prague with a point.
The coming days are expected to be partly cloudy with intervals of rain and shine and day temperatures around 23 degrees Celsius.
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