Gov't wants 2013 draft budget by end of August

Prague, June 26 (CTK) - The Czech government has taken note of the preparation of the draft 2013 state budget and the medium-term outlook yesterday, Finance Minister Miroslav Kalousek (TOP 09) said after the government's meeting yesterday.

The government approved the fiscal goal for the deficit of public budgets in 2013 at 2.9 percent of GDP in 2013, at 1.9 percent of GDP in 2014 and at 0.9 percent of GDP in 2015.

It assigned Kalousek to complete the draft budget and to submit it to it by end-August.

The government started a discussion on the state budgets last week.

The 2013 deficit has been projected at 100 billion crowns. The Finance Ministry proposes that the deficit drop to 70 billion crowns in 2014 and to 30 billion crowns in 2015.

"The governmnet will make a decision on the draft state budget at the end of September," Kalousek said.

He said the ministers who must integrate the limits in detail in their chapters know that they will have to solve a number of points at issue in August.

The opposition Social Democrats (CSSD) say they are afraid the budget will again be based on across-the-board cuts and austerity measures.

CSSD chairman Bohuslav Sobotka repeated his call on the government to reassess the introduction of the second pension pillar and the property settlement between the state and churches.

Within the second pension pillar people are to be able to take a percentage of their social insurance out from the pay-as-you-go system and send the money to private funds on the condition they add something from their own pockets.

The settlement with churches counts among others with the payment of 56 billion crowns, or 79 to 96 billion crowns including inflation, to churches over the next 30 years in compensation for some property that the communist regime confiscated from them.

This year's budget deficit was projected at 105 billion crowns, but it stood at 79 billion crowns at the end of May already.

Kalousek still insists the planned level should not be crossed this year.

In April the government approved a number of austerity measures to take effect next year.

VAT will grow from 15 to 21 percent, health insurance caps will be abolished, flat expense write-offs of the self-employed will be reduced and the indexation of pensions is to be lowered.

Most ministries will have to dramatically cut their budgets. Some say this is a problem after the cuts they made in the past years.

The measures are to decrease the deficit of public finances below 3 percent. Some of them are to be only valid until 2015.

($1=20.669 crowns)