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2016 budget surplus to help repay debt, boost investments

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Prague, April 24 (CTK) – The Czech government approved today the 2016 financial management and decided to use the 62 billion crown budget surplus to help repay the state debt and finance some projects, Education Minister Katerina Valachova (Social Democrats, CSSD) has said during the cabinet meeting.

The proposal by the senior government CSSD to turn the surplus into a reserve for pension indexation in the future was not supported.

The government must submit the report on the state’s financial management, including the use of the budget surplus, to the Chamber of Deputies by the weekend.

Valachova said the government agreed to set aside about ten billion crowns from the surplus for investments. The money is to be used for school and hospital repairs, among others.

Andrej Babis (ANO), finance minister and first deputy prime minister, said his ministry will only support the investments ready for immediate launch.

“Every ministry will make a revision (of its plans). European money is drawn badly, while it is to be drawn primarily,” Babis said.

“By May 9, ministers are to send to the prime minister (Bohuslav Sobotka, CSSD) and Babis proposals to boost government investments within the current investment programme,” government spokesman Martin Ayrer said.

The coalition government, which is comprised of the CSSD, ANO and the Christian Democrats (KDU-CSL), started debating the use of the budget surplus earlier this year already.

Babis said the surplus does not exist materially, it is but an administrative act.

Sobotka also said it does not exist in the form of real money.

“The Finance Ministry issued fewer state bonds to the amount of the surplus. If the government decided to use the money, the Finance Ministry would have to issue new bonds in the same amount,” Sobotka said recently.

The surplus of the state budget rose to 4.7 billion crowns as from the end of March from 3.7 billion in February.

It stood at a record 43.6 billion crowns as of the end of March 2016. It rose to the record high 62 billion crowns by the end of the year.

The Finance Ministry ascribes the strong year-on-year decrease to less money received from the EU.

This year’s budget was approved with a projected deficit of 60 billion crowns.

($1=25.179 crowns)

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