Press Conferences

22. 9. 2008 12:02

Press Conference after the Meeting of the Government, Held on Monday 22nd September 2008

Jana Bartošová, Government spokesperson: Good afternoon ladies and gentlemen, welcome to the press conference after the meeting of the government. I welcome members of the government, the Prime Minister, Mr. Mirek Topolánek, the deputy Prime Minister and the Minister of Labour and Social Affairs, Mr. Petr Nečas, the Minister of Finance, Mr. Miroslav Kalousek and the Minister of Transport, Mr. Aleš Řebíček. I ask the Prime Minister for his introductory speech.

Mirek Topolánek, Prime Minister of the Czech Republic: We have debated number of budgets which will be commented on. It concerns the state budget, the budget of the State Fund of Transport Infrastructure, and budget of the Housing Development Fund. For this purpose I have brought relevant experts here. Petr Nečas will present draft government orders on pension increase and other connecting issues. An issue which I would like to comment on is the Bill amending the Act on Product Technical Requirements. It concerns the new way of providing technical norms. It is a matter which we have been preparing and which we announced and it is now being prepared in the legislative form. It will reduce costs for entrepreneurs by one half. They will save about 50 million crowns for purchase of norms as norms are transferred from paper form to the electronic form. Just for your information, a self-employed chimneysweeper, for example, spends for norms about 30000 crowns yearly and 3000-5000 for various changes and upgrades. Now it will be half of this amount in case of norm in paper form and much less in case he uses the electronic form. We took a negative stand to the proposal of Member of Parliament Sehor, Šimonovský, Melčák and Pohanka not because of different opinions in the discussion which is being held by the government but because it contravenes the directive of the EU. At present we are debating the government bill which deals with influence of buildings on environment and with the building permit procedure. We intend to recommend Members of Parliament to accept this version which will be proposed by the government. Our negative stand is not fully negative; we will lead a discussion with them. A long debate was held on Thesis of the Act on Public Servants and on Education in Public Administration which was to amend that Service Act of 1994. We noted these thesis and we recommended the Minister of Interior to prepare the subject-matter of the law which we would deal with and which would respect not only the original thesis but also comments resulting from the inter-ministerial discussion. We approved the Report on Situation of the Romany Communities. There was a long debate on the car fleet of the public administration. We will debate it at the session of the economic ministers and the issue will not be evaluated only from the environmental point of view but also from the economic point of view, as we would like to take economic aspect into consideration in case we are able to reach an agreement on a bulk purchase. As you could see in case of the Ministry of Interior, through a bulk purchase it is possible to reach far bigger bulk discount than the public administration was used to. I will leave information on all the other items to my colleagues. There is one more remark to add – the meeting began with the session of the government committee for the EU at which we approved or rather confirmed the position of the Czech Republic to the negotiation on the common agricultural policy. We also discussed the preparation of the Czech presidency, the framework position to documents of the renewed social agenda. In case of any questions, ask Petr Nečas. We debated the draft directive of the Council of so called "Blue Cards", on residency of citizens from third countries for the purpose of getting jobs where an excellent qualification is required. It is rather controversial material and the position of the Czech Republic is clear. Basically, we do not refuse that principle as a complement of our "Green Cards"; nevertheless, only after the definite completion of the single market from the point of view of free movement of workers. We regard that discussion as groundless until the single market is established. That was introductory information and now I ask my colleagues to inform you on essential issues.

Jana Bartošová, Government spokesperson: I thank the Prime Minister and now the Minister of Finance, Mr. Miroslav Kalousek has the floor.

Miroslav Kalousek, Minister of Finance: Thank you. Ladies and gentlemen, the government approved today definitely the Bill on the State Budget for 2009. Two weeks ago I informed you on changes which had been agreed on at the last meeting. It concerned the increase of revenues and expenditures by 700 million crowns. They were revenues resulting from the sale of immovable property. Following the projection of those changes in the budget I submitted a new draft of the state budget in which revenues amounted to 1114 billion crowns and expenditures amounted to 1152,1 billion crowns. The deficit remained unchanged – 38,1 billion crowns. We have incorporated several suggestion of technical character, which posed administrators of the individual budget chapters, in the draft. As they were not allowed to solve their problem extensively, they had to solve them intensively. The last open chapter was that of the Ministry of Education. In this case the Prime Minister supported the request of the Minister of Education for increasing that chapter. It was declared as a priority of the government. Therefore the Minister of Finance had to submit a solution. The solution consists in increasing the chapter of the Ministry of Education by 1 billion crowns as we have found 400 million crowns in the Chapter General Treasury and 600 million crowns will be transferred from the State Fund of Transport Infrastructure, as we increased revenue from toll by 600 billion crowns and by this amount the subsidy to the budget of the State Fund of Transport Infrastructure will be decreased. To say it briefly, that one billion crowns for the Ministry of Education consists of 600-million-crowns-subsidy of the state budget which was originally intended to the State Fund of Transport Infrastructure and of 400 million crowns from the Chapter General Treasury. The expenditure framework of the State Fund of Transport Infrastructure is not changed, as toll revenue is updated by those 600 million crowns. I would like to point out that owing to that nationwide discussion which is being held, the area of education is really extraordinary priority in comparison with other chapters. While most of other ministries must settle for lower expenditures in comparison with the last year, and in comparison with medium-term limits approved in spring, the chapter of the Ministry of Education received 4 billion crowns for salaries of teachers in the regional education system, which represent salary increase of teachers above 12% and now 1 billion crown was added for priorities of the educational system. This change will be projected to the revenue and expenditure side of the state budget and therefore I ask you to correct those figures by 600 million crowns in the state budget as they are those 600 million crowns which will be projected to the State Fund of Transport Infrastructure. A quite rightful issue, and I anticipate it, is that of the discussion on an optimistic and pessimistic scenario of revenue of the state budget with regard to the fact that the state budget is based on indicators of the first half of this year when especially the indicator of the growth of our economy had been expected at the amount of 4,8%. In spring it was predicted as a rather conservative figure but owing to the fact that the economic cycle and the financial crisis were faster, I must say now that it is quite optimistic. It is not beyond the reality but it is on the edge of the optimistic scenario. I proposed to the government not to change the procedure, not to change scenarios and the estimate of revenues, as we, unlike former governments, meet expenditure limits. It means that in case of lower revenues only the total deficit is endangered. We are convinced that nowadays nobody knows what will be in one week or in one month and that more exact figures will be available at the turn of the year. If those data, at the turn of the year, are favourable enough that we will expect to meet our revenues, even though in a different structure, we would not have to do any changes. If those data will be unfavourable, then the government will have to take measures in connection with restriction of some operational expenditure to meet the deficit. Nevertheless, I would like to do this operation as late as possible, so that the information would be the most precise; I mean in the beginning of January in the course of specifying the budget. I am of the opinion that now there is not time to make rash decisions as the situation is changing and nobody is able to anticipate its development. That was information on the draft of the state budget. With regard to the fact that the deputy Prime Minister Čunek is not present, I would like to say that apart from the budget of the State Fund of Transport Infrastructure, also the budget of the State Housing development Fund was approved in the version submitted by the Ministry for Regional Development. The total amount of expenditures will amount to 3 billion and 55 million crowns in the following year. The main priority will be the Panel Programme for restoration and heat isolation of panel houses, our territory is abundant in after the socialist era. Further priority is the construction of social houses for young families.

Jana Bartošová, Government spokesperson: I thank the minister of Finance and now the Deputy Prime Minister, Mr. Petr Nečas has the floor.

Petr Nečas, Deputy Prime Minister and Minister of Labour and Social Affairs: Thank you, good afternoon ladies and gentlemen. The government approved today the Draft Government Order through which pensions will be increased by 3,4%, which means the increase of average pension by 330 crowns monthly. It will be done through the increase of the adequate portion of pension by 4,4% and the basic portion will remain the same a it was increased starting from August of this year by 460 crowns. This proposal will lead to the increase of the average amount of the old-age pension up to 9989 crowns as of 1st January 2009. It means that the average pension will exceed 10000 crowns in the course of the next year. The average real pension will be by more than 11% higher than it was in 1989 and it will be the highest pension since 1989. The increase of pension between January 2008 and January 2009 will be 1146 crowns, which is rather steep rise of pensions. I point out that during the last election period pensions grew by 1100 crowns. If we take into consideration the fact that the Topolánek´s cabinet started its activities in September 2006 when the average pension was 8100 crowns, after the New Year it will be 10000 crowns. The total expenditures planned for that valorisation amount to 10,7 billion crowns and they will be drawn from the budgetary chapter of the Ministry of Labour and Social Affairs and about 400 million crowns will be drawn from other specific chapters which support the pension system for persons who perform services for the Ministry of Defence or the Ministry of Interior. Also for the next year the pension system will remain surplus and it will respond to the price growth between January 2008 and July 2008. The government also approved the Government Order on the pension assessment basis for 2007 and relevant coefficients, including so called reduction thresholds. The first reduction threshold will be increased by 500 crowns up to 10500 crowns. The second reduction threshold will be increased by 2200 crowns up to 27000 crowns. Different part of incomes is included into assessment basis these reduction thresholds – 90% into the first reduction threshold, 30% into the second reduction threshold and only 10% into the third reduction threshold. The reason for this amendment is to prevent levelling out of pensions in case of further pension increase. Apart from these government orders also the Draft Government Order on Increase of Extras to Pensions in 2009 was approved which concerned extras for participants in the revolt and for those who were persecuted under the communist regime. These extras will be increased by 4,4% in comparison with current year. Based on further government order adjustment in amounts for assessment of medical insurance assessment basis has been set.

Jana Bartošová, Government spokesperson: I thank the Deputy Prime Minister and now the Minister of Transport has the floor.

Aleš Řebíček, Minister of Transport: Thank you, good afternoon. I will mention three matters in my introductory speech. They will concern the budget of the State Fund of Transport Infrastructure, the time schedule of the construction of infrastructure and the toll for cars over 3,5 tons. As far as the budget of the State Fund of Transport Infrastructure (SFTI) is concerned, the government adopted the resolution in which it recommended the steering committee of the SFTI to adopt, in the framework of budgetary measures which would follow in the course of the next year, recommendations for the purpose-built constructions. They had connection with the requirements of the Green Party concerning railways, which I supported, and the second matter concerned constructions which had had to be postponed because of the cutting of funds by 7,5 billion crowns. But there is a surplus amounted to 140 billion crowns and therefore we will revert to the original scheduled terms. That was information on the budget. So as to avoid misinterpretation in the regional press, I would like to point out that it concerns the bypass of Frýdek-Místek and Hodonín and other constructions. It is stated in the resolution; you can find it in the annex. As to the time schedule, it is proposed in compliance with the budgetary outlook for 2009, 2010, and 2011. The update of the schedule will have to be done in compliance with the budget as it must respond to the accrual and deferral. A significant change consists in the fact that based on the requirement of the Pardubice Region, the finish of construction of the motorway R35 was postponed to 2017. We have cleared up certain technical and technological issues with Mr. Minister Bursík during the last two weeks, in which the debate on the budget was suspended. We believe we will be able to solve the problem of that birds´ area in the framework of the European Commission by 2017 and not by 2021 as we expected. As to the toll for cars over 3,5 tons, I am aware of the fact that our procedure was not standard one. It should have been a government proposal used in the procedure, nevertheless I used, following the approval of our coalition and certain opposition deputies, the proposal of deputies as we had to have an approval of the European Commission because we can apply toll system for cars over 3,5 tons on the existing motorways. In case of a different procedure I would not manage to push it through the legislative process. Thank you.

Jana Bartošová, Government spokesperson: I thank the Minister of Transport and now there is time for your questions. The Czech News Agency.

Jakub Dospěva, Czech News Agency: Good afternoon, I would like to ask whether you have any detailed information on the time of arrival of the plane with body of our ambassador from Pakistan. The government is said to begin its session with one minute of silence. Was it really like that? Thank you.

Mirek Topolánek, Prime Minister of the Czech Republic: Death of an ambassador, the first ambassador in our history is really very sad and tragic event. The aircraft with body of Ivo Ždárek is to land at 23:45 at the Prague airport in Ruzyně. We will certainly be present there; I suppose that together with Mr. President. I have nothing to say about it. One minute of silence in the beginning of the meeting of the government is absolutely logical. I regard this event as a challenge, so that we as the Czech Republic would strive after, in the framework of the international community, reaching peaceful solution of conflicts and staying on the side of the fight against terrorism, because the Pakistani event was unprecedented; nevertheless, quite common in that region and it destabilized not only Pakistan itself but also neighbour countries. I am of the opinion that they should be nervous in India and in Afghanistan where we are operating in the framework of the PRT and especially Logar is situated at Pakistan borders and also in Logar an incident occurred. Soldiers are stabilized, those injuries, which I could specify, are not very serious; nevertheless, you certainly have information. They will be transferred via Rammstein to the Czech Republic as soon as possible. It is the second such an extraordinary event in several days and it is evidence of the fact that areas where we are operating and where we must be operating are not very safe; we are deeply convinced about that and I sympathize with the family of Ivo Žďárek and I think that this event evidence the fact that the post of an ambassador is not a safe post and that it may be very dangerous.

Jana Bartošová, Government spokesperson: I thank the Prime Minister and the Czech News Agency once more.

Jakub Šindelář, Czech News Agency: I would like to ask whether the higher estimate of the toll has a connection with the extension of the toll system to those smaller lorries over 3,5 tons? And then I have the second question to the Minister Kalousek – what is the expenditure framework of that Housing Development Fund? We informed on Friday that the Ministry for Regional Development had asked for 5,5 billion crowns.

Aleš Řebíček, Minister of Transport: It is not connected to the toll collection. I am of the opinion that the toll collection of lorries over 3,5 tons will have a neutral impact; I am convinced of that. We ourselves wonder what the progress will be like. In any rate, the reason of this measure is to maintain fairness towards those vehicles; payments will be charged according to covered kilometres; flat rate will not be applied. The budget is higher by the toll, by about 600 million crowns; nevertheless it is only an estimate. We suppose that a small reserve will remain.

Mirek Topolánek, Prime Minister of the Czech Republic: He said it in a very complicated way. Following the discussion with the Minister of Finance and following the underestimated revenue from toll amounted to 600 million crowns; therefore we could afford to transfer that amount from the expected encashment.

Miroslav Kalousek, Minister of Finance: The estimates were very conservative and they will remain conservative in the future with regard to the successfulness of the toll collection. As to your question concerning the expenditure framework of the State Housing Development Fund, I suppose that it is rather a misunderstanding. You are confusing two data. One datum is a real expenditure framework of the State Housing Development Fund and it is 3,055 billion crowns. This is an amount which can be spent by the State Housing Development Fund. The other thing is the Programme of the Social Housing, as those programmes are long-term ones. They are programmes which are co-funded by the fund or the fund contributes to young families. They are long-term programmes. The total liabilities resulting from agreements which the fund will conclude in 2009 will be really 5,5 billion crowns, but it does not mean that 5,5 billion will be spent in 2009; they are total liabilities resulting from agreements concluded in 2009. Nevertheless, the expenditure framework is 3,055 for 2009.

Jana Bartošová, Government spokesperson: Thank you. The Czech TV.

Czech TV: I have a question concerning the budget. That small reserve – will not be nearly 2,5 billion which might be collected from the toll in addition in case we do not calculate those 600 million crowns? Perhaps it is a question to Minister Kalousek – is that reserve a possibility how to cover losses of the state budget, because if we compare your 4,8% estimate of growth and less that 4% which are estimated by certain experts, it might be tens of billion crowns lacking in the state budget. How could they be covered? Would not be better to solve the problem sooner?

Miroslav Kalousek, Minister of Finance: Could you please name one of those experts? Then I will express my opinion on the percentage. If you say certain experts, I would like to know with whom I am confronted.

Czech TV: You are certainly driving at the speech of Mr. Paroubek in the TV programme of Václav Moravec. I am driving at that fact that even economists of Czech banks are talking about ten billion crowns but they do not specify it so precisely like Mr. Paroubek.

Miroslav Kalousek, Minister of Finance: I am not driving at anything; I just wanted to know what experts you meant.

Czech TV: Those economists.

Miroslav Kalousek, Minister of Finance: I will answer it with pleasure. When we are talking about the toll, it does not concern any reserve. I point out once more that in case of the state budget, as well as in case of the entire system of public budgets the government insists on meeting of expenditure limits and it meets them. It means that regardless of higher toll collection; we will not spend a single crown more than it was stated by the Parliament in the respective law in 2007. I repeat it once more – if that simple procedure was met by the previous governments, we would have public budgets balanced now. Only in 2006 the government breached the law by 56 billion crowns. The reason is that there is no sanction in the law and the government can propose an update. We decided not to do it. We will observe the law, which is one of the most efficient tools how to keep budgets under control. If the Ministry of Transport collect by 5 billion crowns more from the toll, then an surplus of the budget of the State Fund of Transport Infrastructure would occurr; nothing more because it would be surplus of the SFTI and the SFTI would have lower deficit that the planned one. But it must not spend a single crown more that it is planned for 2009, which are those 84 billion crowns and some other millions including a loan of the EIB. That was regarding your question on the toll. As to the growth estimate, we really expected that figure of 4,8% and at that time it was rather conservative expectation. I agree that now it is very optimistic figure. The impact on the state budget is about 10 billion crowns per 1% of GDP in case no change of other indicators. Nobody can say now that it will not be 4,8% but 3,8%. I do not expect any catastrophe. I expect cooling down. We will know more precisely at the turn of this year whether the cooling down will mean decline to 4,2% or to 3,8%, including the composition of our revenues. I do not recommend the government to make corrections per partes. It is still possible; it is not till unrealistic that we will not have to make any corrections of revenues. In case of rather different structure of revenues, they might be reached. In case it is apparent that it is not realistic, then it will be valid what we said in preparation of the budget – that we will meet the expenditure limits and we will adhere to the budget. In such a case there will not be other solution than to restrict certain operational expenditure in some budget chapters so as not to increase the deficit. But there is still time enough to make such a decision. It is no use to make it now and then once more. It should be made once and definitely if it is necessary at all. Perhaps it will not be necessary.

Mirek Topolánek, Prime Minister of the Czech Republic: I would also like to respond to those experts. I should say that I am convinced, and I am not alone – also other economists, real economists are convinced that the Czech Republic is very well prepared for that financial crisis that is spreading from the USA; not only because our financial institutions are not directly dependant on those mortgage bonds; nevertheless, we will be secondarily influenced by the marked drop of the Eurozone. I was in Spain where a decline of the GDP by 0,3% is expected. It may influence us secondarily, but just the reform of the public budget and a number of amendments on the expenditure side of the state budget will cause a good condition of ours and I am deeply convinced that the impact on the Czech economy will be markedly lower that on the bordering countries. It is not only my deep conviction; it is based on prognoses of real economists.

Jana Bartošová, Government spokesperson: Thank you, the Minister of Labour and Social Affairs, I am sorry the Minister of Transport will add something.

Aleš Řebíček, Minister of Transport: I apologize but I was asked a question and I will answer it. As to the budget of the toll, we promised hauliers to solve the problem of the bulk discount and I must expect lower collection from the toll just because fo that discount. This is the difference whether we call it a small reserve or not. This is the difference which must be taken into consideration. I would like you to understand one basis matter concerning the budget of the SFTI. For many years the consumption tax was transferred to the SFTI budget, but it is the same matter. The important thing is what the amount of that expenditure is, what its composition is and whether it is approved by the government or by the Chamber of Deputies. If we get a subsidy from the state budget and from an operational programme, then it is the amount which must not be exceeded. That is the problem the Minister of Finance was speaking about. This is essential for us and we must be able to prepare budget for the individual constructions.

Petr Nečas, Deputy Prime Minister and Minister of Labour and Social Affairs: I would still like to add information on the expenditure limits which are one of the basic stabilization elements of public finances. First of all I would like to remind you the situation which was about one year or one year and a half ago, when significant part of the political representation doubted those measures on the expenditure side of the state budget. I would like to remind that 50% of expenditures which we have form mandatory expenditures. If it were not those stabilization measures which were made despite protests of the opposition, nobody would be able to prepare the state budget for the next year with the deficit under 3%. These were measures which we foresightedly made in the last year and this year; we prepared our budgets for possible failing boom of the world economy and these measures were made in time. Those who claimed, that there was not necessary to do anything and that we were to maintain the public finances and especially their expenditure side as they were, including automatic valorisation schemes, were mistaken.

Jana Bartošová, Government spokesperson: Thank you, now Deník and then the Czech TV.

Vojtěch Janda, Deník: I have a question to Mr. Minister Kalousek. How much money will be spent from the state budget for the Panel Programme? Will it be more than it was this year?

Miroslav Kalousek, Minister of Finance: It is a matter of contracts which will be concluded by the State Housing Development Fund. I think that there is no reason to suppose any retardation of the programme in comparison with this year.

Jana Bartošová, Government spokesperson: Thank you, the Czech TV.

Mirek Topolánek, Prime Minister of the Czech Republic: I apologize but the session of the State Security Council is now running or it should begin. We need to finish. Excuse me.

Zina Plchová, Czech TV: I have a small question to the Prime Minister. Can you give more concrete information on the return of those three injured soldiers or whether you considered reassessment of the mission?

Mirek Topolánek, Prime Minister of the Czech Republic: I will try to find the SMS I got concerning this matter. I think that it is the Minister of Defence who will have more precise information. I am informed that soldiers are in the American hospital in Bagram and they will be transported to the Czech Republic via Rammstein in the nearest future. I have no precise information. In connection with the state of health, which is stabilized, we do not consider any reassessment of the mission at all. We knew in advance that the PRT (Provincial Reconstruction Team in Logar will be a demanding task for the Czech Army. I had an opportunity to honour the first contingent of that PRT of Logar on the occasion of the NATO Days. The situation in Logar was very complicated. We can do what we are doing and what I promised our soldiers when I was there some time ago – immediate purchase of better technical means. I suppose that far safer vehicles will be delivered there in a moth's time just for this mission and the mission in Hilmand. I would like to say that there is no doubt that the Czech Republic, as a member of NATO, should have its own PRT and there will not be any reassessment made in this respect. On the contrary, we will be trying to secure safer equipment and higher security for our soldiers.

Jana Bartošová, Government spokesperson: Thank you, the last question, Hospodářské noviny.

Petr Vašek, Hospodářské noviny: I have two small questions to Mr. Minister Kalousek concerning that one billion for the sphere of education. How will that one billion be spent – whether it is intended to the tertiary education or something else? And the second question – do you have any money in the state budget for the traditional apportioning of financial means to the local projects which are supported or proposed by deputies in the Chamber of Deputies. Thank you.

Mirek Topolánek, Prime Minister of the Czech Republic: Before Mr. Kalousek starts I would like to say that money for universities has never been lacking, as the support of the tertiary education is the basic priority. Budget specialists of the ministry must respect it. I did not be taken by that trick that financial means for universities were lacking. They have never been lacking.

Miroslav Kalousek, Minister of Finance: I must say with sigh that it was exactly so. The Prime Minister insisted on covering the basic priority of the government, it means the tertiary education. The Ministry of Education reasoned that in case of funding the tertiary education, financial means for some other items would be lacking. Therefore the Prime Minister assigned me with a task to find that one billion crowns and I so did so with a heavy heart. It is the matter of the administrator of those means how they will be spent. The Minister of Education is not here with us and I do not want to speak on his behalf, but as I know the structure I suppose that relatively significant part of those financial means will be spent for teaching aids at elementary and secondary schools. But ask him, please. The Ministry of Education has time by tomorrow to inform the Ministry of Finance what priorities should be covered and I do not want to speak here on behalf of the Minister of Education.

Mirek Topolánek, Prime Minister of the Czech Republic: I would like to add something that does not concern the Ministry of Education itself – ministers or rather officials at the individual ministries have not understood that structural funds are not any extra money. It is our money which we sent to Brussels and some higher amount will be returned back by 2013 or by 2015. It is not possible to add items for the tertiary education with that relatively significant support and increased funds for science and research or universities or with structural funds which will be drawn in the framework of those three operational programmes which concern universities is mistaken in my opinion. I do not agree with it. I push it through hard in the government and I add those items.

Miroslav Kalousek, Minister of Finance: Excuse me, as to the second question – you must have noticed that such an item had never been in the state budget. It is not there in this year either. This year, the Minister of Finance desperately wishes the activity to be the least as possible; nevertheless, the Chamber of deputies is a sovereign body. But it is true that each expenditure item which will be proposed must be accompanied by a proposal for decrease of other item. I firmly believe that the Chamber of deputies will be responsible. In the last year these expenditures were decrease three times. I will be happy if that trend continues.

Jana Bartošová, Government spokesperson: Thank you, good-bye.

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