Ten regional Civic Democratic Party leaders have called on the six rebel MPs from the party to “end their rebellion” and vote in favour of the government proposed tax hikes. In an open letter to the deputies the regional leaders say that their behaviour is damaging the Civic Democratic Party ahead of the autumn elections and claim that the real reason behind the rebellion is an attempt to oust Petr Nečas from his post as party leader and prime minister. Three regional leaders have not supported the appeal.
Finance Minister Miroslav Kalousek has warned there is not much
manoeuvring space in revising the government’s austerity package for
2013. In an interview for the daily Pravo the finance minister said that
the present agreement was hard-won and involved numerous concessions and
would be in danger of collapsing in the event of radical changes.
The bill, which is crucial to the government’s fiscal consolidation plans, was rejected by the lower house this week and has been sent back linked to a vote of confidence in the centre-right administration. It was rejected due to six deputies from the Civic Democratic Party who oppose tax hikes in principle and want the austerity measures to focus more on the expenditures side of the budget. Prime Minister Petr Nečas said this week that a revision would still be possible but that it must be agreed on by all coalition parties.
The Czech GDP has fallen in the second quarter of 2012; nominal salaries grew, but not as fast as consumer prices; more Czech companies are among top earners in the region; complicated hiring procedures for foreigners may discourage investors; number of personal bankruptcies has grown immensely in the first half of this year.
Education Minister Petr Fiala told university chancellors on Wednesday that next year Czech universities will operate on a budget of 21.8 billion crowns – roughly 700 million crowns more than in 2012. The minister made the statement at a meeting of the Czech Rectors Conference in České Budějovice. The amount was confirmed by the head of the Czech Rectors Conference Václav Hampl.
The government has again approved a stabilisation package rejected by the
Chamber of Deputies on Wednesday, where several rebel MPs were
in its blocking. The coalition government needed 101 votes but six Civic
Democrats– opposed to the idea of further raising the two-tier VAT rate
– voted against. The bill is being pushed to help lower the deficit. The
centre-right government led by Prime Minister Petr Nečas is staking its
future on the bill by tying it to a vote of confidence.
The prime minister suggested on Thursday that the next few weeks would reveal rebel MPs’ ‘true intentions’, that is, whether they were purposely trying to damage the government or individual politicians, or were honestly concerned about programme issues.
The Nečas cabinet suffered its first significant defeat in its consolidation drive on Wednesday. The lower house rejected a crucial part of its austerity package –a controversial bill on tax hikes aimed at bringing the gap in public finances below 3 percent of GDP in 2013. The move has left the prime minister fighting not only for the future of his reform cabinet but primarily his own future as the head of the Civic Democratic Party and the government.
The lower house did not pass the controversial tax bill late on Wednesday,
with only 94 MPs voting for the government’s stabilisation package. The
coalition needed 101 votes, but six Civic Democratic deputies and one
deputy from the Public Affairs party voted against the bill together with
the opposition. The Finance Minister Miroslav Kalousek had announced
earlier on Wednesday that he will resubmit the exact same proposal to the
government on Thursday if the bill is rejected, so it can be voted on
again. While Prime Minister Petr Nečas had previous announced on Tuesday
that he will link a vote of confidence for his government to the repeat
vote on the bill.
The rejected bill proposed a raise in VAT of one percentage point, as well as other measure including higher taxes for individuals making over 100 thousand crowns per month. This is one of the measures that was meant to help lower the deficit, which the current coalition government has set as one of its main goals. The bill was passed by the lower house once already, but was voted down in the Senate, after which it came back to the Chamber of Deputies.
The international rating agency Standard & Poor's gave the city of Olomouc higher marks for financial stability this year. The financial outlook for the central Moravian city, according to the agency, went from stable last year, to positive. The rating agency’s analysts highlighted Olomouc’s solid budget efficiency, cautious debt management and overall prudent borrowing policies. Deputy mayor Ivo Vlach said that one of the reasons for the improved rating is the city’s growing operating surplus, that has more than doubled in 2010 and 2011 compared to the figures in 2009. The Olomouc budget had 2.36 billion crowns in earnings in the beginning of 2012, and expenses of 2.44 billion. The city plans to invest over 800 million crowns this year.
A growing conflict within the senior coalition Civic Democrat party is threatening to topple the government of Prime Minister Petr Nečas. Some Civic Democrat MPs have refused to back government legislation raising the VAT rates, a bill the prime minister said was crucial for the future existence of the government. If the bill does get rejected by the lower, Mr Nečas threatened to send the exact same legislation to Parliament again, this time linked to a vote of confidence in his government.
Prime Minister Petr Necas said on Tuesday he was prepared to stake his
government's future on winning parliamentary approval for controversial tax
hikes aimed at reducing the gap in public spending. The proposed bill
includes a 1 percent hike in the lower and basic VAT rates to 15 and 21
percent respectively in 2013 and a “solidarity tax for the rich”
pertaining to people earning more than 100,000 crowns a month for a period
of three years. The bill, earlier rejected by the Senate, has divided the
lower house with some members of the prime minister’s own Civic Democrats
refusing to support it on the grounds that it would strangle the economy.
The governing coalition which now has 100 deputies in the lower house would
need to muster 101 votes to overturn the Senate’s veto. However six Civic
Democrat deputies have indicated they will not support the bill.
At a meeting of his party’s deputies club on Tuesday Prime Minister Petr Nečas said he was prepared to link the fate of the government to the said bill in a repeat vote should it be rejected. He said the ruling coalition would have no reason to remain in office if it were unable to fulfill its primary goal –fulfilling its fiscal consolidation plan.
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