President Václav Klaus is to receive Finance Minister Miroslav Kalousek at Prague Castle on Tuesday, continuing a series of meetin+gs between the president and ministers of the newly installed government. Mr Klaus is meeting all ministers to familiarize himself with issues and goals of the new government. He has already received the environment, foreign affairs and transport ministers, as well as Prime Minister Petr Nečas. Mr Kalousek’s main task will be a reform of the tax system as well as ridding the country of debt. Last week, the government approved a state budget deficit of 135 billion Czech crowns for the year 2011.
The Czech president may see his income reduced and taxed within the government’s austerity measures. The cabinet has proposed reducing the president’s monthly salary – which amounts to 196.000 crowns – by five percent and levelling a 15 percent tax on his income. Ex-president Vaclav Havel will also see his 50 thousand crown monthly income taxed. Under current law the president alone is exempted from tax duty. Neither President Klaus, not ex-president Havel have commented on the proposal.
The ministries of transport, interior, agriculture and defence will be most severely affected by the government’s austerity package in 2011, the CTK news agency reported Friday. The transport ministry will have to operate on a 10-billion-crown lower budget, the interior will get 8 billion crowns less than this year and the ministries of agriculture and defence will have to take 5 billion crown cuts each. Cabinet members have been given until next Friday to outline ways of implementing the reductions. The Foreign Ministry has already announced plans to lay-off over a hundred employees and close down six embassies.
After seeing its budget reduced by over 150 million Czech crowns, the foreign ministry is being forced to make significant cuts in staff. Foreign Minister Karel Schwarzenberg met with Václav Klaus on Thursday to discuss implementing the cuts, following an announcement last week that some Czech embassies would have to be closed down. But, although cost-cutting is now the operative word in the public sector, the foreign minister’s plan has come under fire from deputies and experts alike.
The Czech government approved the Ministry of Finance’s proposal for 2011’s state budget on Wednesday. Prime Minister Petr Nečas told journalists that the goal for the 2011 budget was to curb government spending. Next year’s state budget deficit is to be limited to 135 billion Czech crowns, or 4.6 percent GDP. The lower chamber of parliament is set to discuss the budget proposal in October. For this year, a state budget deficit of 162.9 billion Czech crowns has been approved.
In the wake of the latest floods that hit parts of the Czech Republic over the weekend, the Czech government has come up with an idea of how to help pay for the damages. Finance Minister Miroslav Kalousek wants every tax payer to pay an extra 100 crowns into what he calls a “flood solidarity reserve”. But critics say that the government only wants to raise taxes, and is using the floods as cover.
The unemployment rate rose to 8.7 percent in July after four months of decline, official data showed on Monday. The increase of 0,2 percent is being attributed to fresh school graduates registering at labour offices. In June, the rate stood at 8.5 percent, the lowest level since last October when the country showed gradual signs of recovering from the global economic slump.
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