The Constitutional Court verdict thanks to which elections will be postponed could help Finance Minister Eduard Janota’s budget proposal. The proposal would lower by budget gap by CZK 70 billion. Janota’s plan to save could come into effect next year if Janota presents it to the Senate after the Chamber of Deputies has been dissolved this September or October. The ODS and TOP 09 have a majority in the Senate, and if the lower house is dissolved, the Senate would have legislative powers.
After the elections, it would be up to the newly formed Chamber of Deputies to approve Janota’s proposal. And if the right wing wins the elections, the proposed budget could pass.
Janota: I will do all it takes
Last Thursday, HN reported that the ODS has decided to support Janota’s budget plan. Quite logically, Janota’s wants to make full use of this development. “I will do all it takes to get this proposal approved in a legitimate way. My task is to find any legal means in order to lower the budget deficit by CZK 70 billion,” Janota told HN> Thanks to postponing of the elections and the dissolution of the Chamber of Deputies, Janota will by able to bypass the current Chamber of Deputies, where his proposal stands no chance of being passed. Going through the Senate is completely legitimate, though, if the Chamber of Deputies has been dissolved.
Právo noted last Thursday that the Senate would have legislative powers in such a scenario. When the lower house is dissolved, the upper chamber of parliament is the first to pass all laws, with the exception of constitutional amendments, the budget, final accounts, election laws and international agreements.
But the Senate is able to pass bills related to taxes, healthcare and social benefits – all areas where Janota is proposing to make changes. It would be the first time in Czech history that the Senate would pass a bill at a time when the lower house has been dissolved After approval from the Senate, Janota’s cuts would go the the new Chamber of Deputies, which could pass the bill if the ODS, TOP 09 and the Greens, which approve of the cuts, had a majority in the lower house.
Klaus: I support Janota
Before going to the Chamber of Deputies, Janota’s proposal would need to signed by the Czech President. That should pose no problem, however, since Václav Klaus has praised Janota’s plan on several occasions. The last time he did this was during his Thursday meeting with PM Jan Fischer.
If Janota’s proposal gains approval, the Czech Republic could avoid having a more than CZK 200 billion budget gap for the first time in its history. The proposal would bring down the budget from CZK 230 billion to CZK 160 billion.
“Approving Janota’s proposal is the only chance to avoid the unacceptably high budget deficit of CZK 230 billion,” said ODS deputy head Petr Nečas. “Although we don’t like Janota’s proposal, we would still vote for it. It’s better than nothing,” Nečas added. But he said he does not believe that there will be enough time for Janota’s proposal to be approved before the end of the year.
Miroslav Kalousek, the founder of TOP 09 has a similar stance. “Janota’s plan is the only realistic chance to lower the budget gap. If this is not resolved the Czech Republic will end up paying for this,” said Kalousek, whose party has six seats in the Senate.
Higher taxes, lower subsidies
The truth is that Janota’s saving measures would affect every Czech. The finance minister is planning quite drastic cuts to social benefits. He wants to freeze pensions and to also lower child subsidies, maternity and parental subsidies, baby bonuses and sick pay. He also wants to freeze state payments to health insurance companies.
In addition, Janota plans to increase both VAT rates, to increase consumer taxes on petrol, diesel, alcohol, tobacco and cigarettes and to increase health and social insurance for rich Czechs. “The budget situation can be resolved only when we increase revenues and decrease expenses,” said Janota, who was involved in putting together all of country’s budgets since the Czech Republic came into existence.
