Thursday, 24 April 2014

FinMin admits softening draft budget responsibility rules

ČTK |
4 February 2013

Prague, Feb 3 (CTK) - Czech Finance Minister Miroslav Kalousek (TOP 09) admitted in a television debate Sunday that changes may be made to the government's draft "financial constitution," a constitutional bill setting budget responsibility rules, so that it can win support of the required majority of MPs.

A constitutional bill needs support of at least three-fifths of deputies. To make it through, the financial constitution needs support of at least a part of the left opposition.

Senior opposition Social Democrat (CSSD) chairman Bohuslav Sobotka said in the debate on TV Prima Family that a bill specifying the rules of the financial constitution's implementation is still lacking and the government should submit it as quickly as possible.

Kalousek admitted that "certain apprehensions concerning the absence of the implementing bill are comprehensible."

The government and the opposition differ on how "strict" the financial constitution should be.

Kalousek said the coalition parties are ready to discuss the issue. He said he can imagine the bill's key parameters being shifted 5 percent upwards, which means softening the proposed rules so that the bill is acceptable for the required number of opposition deputies and has a chance to succeed.

Sobotka said the parameters projected by the bill are "obsolete" now that the state debt has come close to the figures the financial constitution sets as limits triggering budget responsibility measures.

The parameters must be set in a way to correspond to the state indebtedness level and not to prevent the next government from taking steps in support of economic growth, Sobotka said.

The CSSD is expected to win the next general elections due in mid-2014.

The cabinet approved the financial constitution last October. It sets the maximum limit for the government's debt and establishes the National Budget Council.

It also introduces a debt brake that binds the cabinet to ask parliament for a confidence vote if the public debt reaches 50 or more percent of GDP.

It binds government to take measures if the public debt crosses 40 percent of GDP. This limit has been actually crossed already now. Kalousek said the government is convinced that it is taking active budget responsibility measures.

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