The Cabinet presents revised draft state budget

30-10-2001

The cabinet has presented a new draft budget for the year 2002, although it has failed to satisfy many opposition politicians. The Cabinet, though, believes that all the recommendations from the Lower House - which two weeks ago returned the first version to the cabinet - have been considered. The new draft envisages revenues amounting to 702 billion Czech crowns and an expenditure of 748 billion, making the planned deficit 46 billion crowns. The latest draft gives an extra 2 billion crowns to universities, 1 billion to the regions and 1,5 billion to selected ministries for funding tightened security measures.

But critics of the proposed budget say that the government is relying upon unrealistically optimistic expectations of economic growth and overestimates the value of the revenues. spoke with Ivan Pilip, a former Finance Minister and now an MP for the opposition Four Party Coalition. He sees the new draft as a trick being played by the ruling Social Democrats and the Civic Democratic Party - the ODS - which are bound together by a power-sharing pact - the so-called 'opposition agreement.'

Ivan PilipIvan Pilip "In our opinion there are almost no changes in the new draft, because all the important new numbers are lower thanks to just accounting operations, because the most important so-called change is a lower loss of the Consolidation Agency but it's not a real decrease in the loss, from the accounting point of view it's just postponing the losses from this year to next year. We do agree with some changes in expenditures, above all with increasing the money for universities, at least we are glad that it's included in the new proposal, but from the macro-economic point of view there's nothing important that could change the development of very negative tendencies in the state budget between revenues and expenditures, and we don't see any reason why we should change our attitude to the budget and there's no probability we could vote in favour of the draft."

But the cabinet says it has taken into consideration all the recommendations from the Lower House?

"Well, but the recommendations were voted for by the ODS and the Social Democrats. We had more proposals, that were rejected by the government with the help of the ODS. By the way one of our proposals was that the government should decrease the deficit of the general budget according to the recommendations from the European Union - our proposal was rejected by the government and the MPs for ODS. So please don't confuse the vote of parliament and the proposals that were given by the real opposition - the Four Party Coalition."

So is the new draft budget viable - does it have a chance to pass through the Lower House at all?

"Well, it does, because it's just a game, it's just a theatre from the ODS and the Social Democrats, and definitely they have concluded an agreement already. It's the reality of the last three years that the ODS has been playing a game as if they were the opposition but in fact they let the Social Democrats govern."

30-10-2001