Second draft state budget passed in first reading, insignificant changes made

15-11-2001

Last Friday, the Lower House of Czech Parliament passed the government's second budget draft for 2002 in the first reading. The budget envisages a deficit of nearly 47 billion CZK, expenditures are estimated at 737 billion, and revenues at 690 billion. The House rejected the first version of the state budget in mid-October and asked the government to rework it, criticising the large deficit and unrealistic revenue structure. Individual chapters of the budget will now be discussed by parliamentary committees. The final vote is expected before the end of the year. The budget was passed thanks to votes from MPs for the ruling Social Democrats and the main opposition Civic Democrats, who are bound by a controversial power-sharing pact. Some of the other opposition parties as well as independent economic analysts claim that the changes the government made in the second version are mainly cosmetic. Ondrej Schneider, chief economist at the Patria Finance investment bank, says the second version of the budget is even worse than the first. He sees two major differences: