Government fails to agree on 2005 budget

The outgoing government on Wednesday failed to reach agreement on next year's state budget. The finance ministry proposed a deficit of 94 billion crowns but the demands made by individual ministries were 14 billion crowns higher. Finance Minister Bohuslav Sobotka said his proposal met with strong protests from all sides but he argued that a deficit 94 billion was the absolute limit. The ceiling is not set by the finance ministry - it is the result of a coalition agreement, Sobotka told the CTK press agency. The Cabinet is to meet again next week to try to reach agreement on the 2005 budget. Although the Czech Republic may have a new government by September, the three party coalition agreement on next year's budget deficit should remain valid.