Nečas admits tax hikes may prove inevitable

Civic Democrat leader Petr Nečas, whose party campaigned against higher taxes in the general elections, has acknowledged that tax hikes may prove inevitable if the country wants to reign in the public finance deficit and introduce health and pension reforms. Following several rounds of talks with his potential coalition partners, TOP09 and Public Affairs, Mr. Nečas said his party was ready to consider raising the lower VAT rate or introducing a unified 19 percent VAT rate. All three parties have stressed that higher taxes should be the last austerity measure considered, if cost-cutting measures in the public sector prove insufficient. The planned shake-up in the public sector will involve cutting both jobs and investments.