Parties reach agreement on austerity package

The lower house of Parliament has approved an austerity package for 2010, removing the threat of a government resignation. The package of tax-hikes and spending cuts will reduce next year’s budget deficit to 162.8 billion crowns that is 5.2 percent of GDP. Following a number of modifications, Finance Minister Eduard Janota’s austerity package was approved by all parliamentary parties with the exception of the Communists.

Friday’s vote gave wide political backing to the interim cabinet led by Prime Minister Jan Fischer, which is expected to lead the country until early general elections in mid-2010, after a court struck down plans to hold an early poll this autumn. Mr. Fisher said that his cabinet would present the lower house with a draft budget proposal for 2010 by September 30, along with the government’s policy programme for the coming months.