Government approves budget proposal for 2005
The Finance Minister Bohuslav Sobotka announced late on Tuesday night that the government had unanimously approved the state budget proposal for 2005, setting the way for it to be put forward to parliament. Although individual ministries had to make some last minute savings, the overall budget proposal still counts on a deficit of some 84 billion crowns (3 billion US dollars).
Although the state budget deficit envisaged for 2005 is significantly lower that the one proposed for this year, some economists are sceptical. The proposed budget includes a pay rise for public service employees and that was one of the reasons why individual ministries were asked to save some 10 billion crowns at the last minute. David Marek is the chief economist with Patria Online and he argues that these are not genuine savings.
"I would say it's quite an ordinary game before dealing with budgetary issues. Every year there are some extraordinary demands from ministries and the Minister of Finance every year has to cut such big demands from the state budget funds. So I would say it's nothing that should be seen as a success. It's a usual game in the government."
The Czech Republic's budget proposal for 2005 falls just short of European Union demands - that the country approved last year in its Convergence Programme.
The Finance Minister Bohuslav Sobotka says that the overrun is an almost negligible 2.5 billion crowns. The economist David Marek fears that the EU will nonetheless not be impressed.
"It seems that we really have a problem fulfilling the Convergence Programme that we promised the European Commission. So it's probably not a problem the overall deficit but a problem with the spending limits. So it could be a problem when dealing with the European Commission and there is a possibility of a fine from Brussels."
But all the governing coalition's MPs will have to turn up. A warning came on Tuesday. Several of its deputies missed a vote in which they were supposed to approve cuts to their own Christmas bonuses. Those cuts would have saved some 150 million crowns for the state coffers. Wednesday's papers relished the blunder. While other public service employees will have to make do with just a symbolic end-of-the-year bonus this year, MPs, senators, judges and state prosecutors will enjoy nearly half an extra monthly salary.
