Ministry of Finance says no second budget package ahead of elections

The Ministry of Finance has said it will prepare a further package to curb the country’s rising budget deficit. But a spokesman said there would be no attempts to push the second package through parliament before elections due in May next year. That ambitious step to set a framework for the 2011 budget had previously been backed by Finance Minister Eduard Janota.

The Czech Republic faces the likelihood of disciplinary measures from the European Commission because of its high deficit. There are also mounting worries that the country’s credit rating could be cut by international agencies.

The Finance Ministry’s comments come with tension still high over the final format of next year’s budget following sweeping changes voted through last week. Last week’s changes, backed by left wing parties, largely aimed at increasing wages of public workers. The government has said it will seek to absorb the extra spending so that the 2010 budget deficit stays at around 163 billion crowns or around 5.3 percent of Gross Domestic Product. That task is set to be the main focus of a Cabinet meeting on January 10.

Top Civic Democrat Petr Nečas called Thursday for the government as a whole and not just the prime minister to give a public commitment that it will seek to curb the budget deficit.

Author: Chris Johnstone