From left, Prime Minister Petr Fiala (ODS) and Minister Zbyňek Stanjura (ODS) at a press conference after a balance visit to the Ministry of Finance, February 16, 2023, Prague.
Prague – The government will aim to reduce the state budget deficit for next year by 70 billion crowns. He wants to adjust taxes, but not increase the overall tax burden, adjust the pension system or reduce the number of civil servants. Prime Minister Petr Fiala (ODS) said this during a balance visit to the Ministry of Finance. Finance Minister Zbyněk Stanjura (ODS) wants to discuss the consolidation package in the spring in the House of Representatives and the Senate.
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Both Fiala and Stanjura emphasized that no decisions on specific austerity measures have yet been approved by the government coalition, so they did not want to comment on them. Fiala said that there is still no agreement on a possible increase in social contributions for self-employed people. According to him, it is necessary to think about the amount of levies in general, due to, among other things, the amount of pensions for self-employed people. “It is appropriate to consider some adjustment. Whether we decide on it and in what amount is a question for the future,” said the prime minister.
Deputy Minister of Labor and Social Affairs Šárka Jelínková (KDU-ČSL) told Czech Television that there is consensus in the coalition on increasing the levy. According to the Seznam Zprávy server, the levy should increase by 60 percent in three years. However, Deputy Prime Minister and Minister for Regional Development Ivan Bartoš (Pirates) objected to this.
Stanjura said that the abolition of tax exemptions should also help to reduce the deficit. According to him, the Ministry of Finance proposes about ten measures in this area, he did not want to be specific. According to him, the impact of its cancellation on the state budget and how many taxpayers use it are assessed for each exception. “If it's thousands of lower taxpayers, we can answer that the exception is unnecessary,” he said.
Stanjura previously stated that the economic experts of the governing parties are dealing with possible savings based on the proposals of the National Economic Council of the Government (NERV) . Information appeared in the media about a possible extension of the retirement age, an increase in some taxes or the cancellation of state support for building savings.
In recent years, the Czech Republic has been struggling with a large structural imbalance in the state budget. Last year, the state budget ended with a deficit of 360.4 billion crowns, which was the third worst economic result after 2021 and 2020. The approved deficit for this year is 295 billion crowns. According to the forecast of the Ministry of Finance, the debt level of the Czech Republic should reach 45.8 percent of GDP this year, which is the highest level ever.
Government wants to strengthen control over energy infrastructure
The government wants to strengthen state control over the energy infrastructure. Prime Minister Petr Fiala (ODS) said this during a balance visit to the Ministry of Finance today, but did not mention specific measures. The prime minister expects a decision on which path the cabinet will take in this direction by the end of the year. Fiala previously stated that the government is considering restructuring the energy company ČEZ, in which the state has a majority stake.
According to Fiala, the Czech Republic has relatively little control over the energy infrastructure compared to other countries. “Thinking about how to strengthen the state's influence on the energy infrastructure is correct. It corresponds to the challenges we face,” said the prime minister. According to him, the cabinet wants to decide how to proceed in this direction by the end of the year. However, Fiala pointed out that the decision involves a number of economic, legal and energy problems that will need to be taken into account. one possibility is the division of the company. He then told Reuters that there are several scenarios at play. Discussions were supposed to revolve around separating CEZ's old energy assets, such as coal and nuclear power plants, from renewable energy sources. The government is dealing with a proposal that would facilitate the division of a joint-stock company of strategic interest, but the legislative council of the government did not recommend adopting the amendment at the end of January.
Fiala emphasized today that the debate on energy security must not be narrowed only to state control over energy infrastructure. According to him, it is also necessary to ensure sufficient sources of energy, especially to develop renewable sources and nuclear energy, and to get rid of dependence on unreliable energy suppliers such as Russia.
