Press Conferences

14. 6. 2008 13:23

Press Conference of the Prime Minister Mirek Topolánek and the Minister of Labour and Social Affairs, Petr Nečas, held on 14th July 2008

Jana Bartošová, Government spokesperson: Good afternoon, ladies and gentlemen, let me welcome you to the fourth stop of the Prime Minister on his tour around ministries; this time we are at the Ministry of Labour and Social Affairs. I welcome the Prime Minister, Mr. Mirek Topolánek and the Minister of Labour and Social Affairs, Mr. Petr Nečas. I give the floor to the Prime Minister.

Mirek Topolánek, Prime Minister of the Czech Republic: We are at our fourth stop and I admit I had not chosen their order; it was rather connected with the time schedule of the individual ministers and with my time schedule. It is true that I visited the fourth ministry in several days at which I had to express my satisfaction. I had to congratulate Mr. Minister Nečas. I had thought some time ago that he preferred to become an army expert, and he has remained an army expert up to now; nevertheless, I sent him to the first line, at a ministry which I regarded as one of the mot complicated from the point of view of the scope of its activities and from the point of view of changes which had to be made, in order to satisfy our citizens. He inherited a ministry which was not at the brink of catastrophe, but it was in a very complicated situation. He inherited non-motivating social system which discouraged people from working and generated high unemployment, even in time when we reached the peak of the economic cycle. He inherited a pension system which would collapse in a medium-term horizon if it were not the work on the reform. The fact that the collapse concerns current forty-year-old people cannot calm us. He inherited a system of sickness benefits which encouraged people to extensive usage of this allowance, to misuse of the system which caused that the Czech Republic had the most sickness rate of all the EU countries; I say sickness rate, I do not say that we would be the most ill nation, because as far are health is concerned, we do not exceed common standards. Those serious problems jeopardized the basis of the financial stability and might cause deformation or a collapse of public budgets. Those problems endangered in fact the social security of citizens. We were criticized by the international institutions, by the OECD and by the European Commission. I want to say that Minister Nečas has mastered overwhelming majority of those problems during that half-a-year of his work for the ministry; in spite of the criticism of those who were responsible or who did not impede those problems. I must mention communists in this respect who voted with the Social democratic Party in the previous election period, and thus, those systems were destroyed. I should remember the pressure of trade unions and very complicated negotiations which Minister Nečas had to lead in the framework of the tripartite. I state all that because if I am to assess Pert Nečas, then it is necessary to speak on the situation which he had to face when entering the ministry. To enter an office which operates well is far simpler and everybody is able to work there. So, apart from the fact that he had to fulfil those requirements of the horizontal character, such as reduction of paperwork, downsizing, organization changes in offices, he had to deal with range of current problems – billions of crowns which were missing in the individual systems, prospects of those systems, he had to work on system reforms which were connected with the aging population. The assessment will be very brief. Only failure must be explained and rationalized; the success of Mr. Minister is apparent. I will just mention a few basic facts. Unemployment rate is a factor which has connection with the economic cycle, but because it is the Ministry of Labour and Social Affairs which deal with this issue, I suppose that it is connected also with tools used by the state in the sphere of employment for mastering the situation. The main merit for that take the Czech firms which offer jobs; nevertheless, reforms lead to the state when firms have a reason to offer jobs, they want to recruit new employees, they want to invest and develop themselves. The tightening of rules for social benefit drawing made thousand of people to enter a job, as the system ceased to be non-motivating. It ceased to encourage people to be out of work and to draw allowances from the state, or from the taxpayers. People suddenly found out that it was advantageous to be employed legally. Number of unemployed Czechs who could enter a job dropped to about 287 thousand. The unemployment rate is according to the methodology of the Eurostat 4,1%. We are holding the sixth position among 27 member countries of the EU, and according to our methodology it is 5,1%. We are drawing closer to the situation which was here in 1990´. It is necessary to add that the Czech economy is able to offer jobs 270 000 legally employed foreigners who take up jobs that Czechs do not want to accept. Further 150 000 jobs are free which means that there are three vacancies or jobs kept by foreigners per two unemployed people – it is huge potential for employment increase. Our real problem is shortage of people, not shortage of jobs. Our problem is not too many reforms but few reforms. Together with the OECD I would like to praise Minister Nečas for work he has done and I want him to continue it. Further great success concerns the sickness leave. Minister Nečas has some figures and he is likely to present them; those figures show that the introduction of waiting times, which is a quite common measure in the west countries, does not impair those who are really ill, but on the contrary, it reduces misuse of the health care and the misuse of sickness leave. We do not want to economize on people who are ill; economies run into billions are result of the fact that the system of sickness leave is not misused; they are not a result of the fact that people do not have salary for three days. That psychological effect is self-evident and it fulfils its function in all countries where this system was introduced. The third success I would like to mention here are works on the pension reform. The fact that trade unions strike against it, it is normal; they strike in the entire Europe. The entire Europe is facing a problem and the problem is aging population. To strike against the demographic development is the same as if we were striking against heat in summer or against cold in winter. Everybody can calculate that if the retirement age is not increased in relation to the growing life expectancy, then pensions must be decreased or payments to the pension system must increased – it is a rule of three, which is taught at elementary schools. Minister Nečas has my absolute support as well as support of the whole government, the OECD and all the institutions which recommend similar measures. I should say that Petr Nečas is a fighter; as he fights for rights of future pensioners, he fights also for the present pensioners. That extraordinary valorisation of pensions which he proposed was absolutely crucial. It means that the valorisation is now done in case of 5% inflation rate, not in case of 10%. As early is in August the pensions will be increased by 465 crowns monthly. The real value of pensions will amount to 107,6% in comparison with 1989 and it will be highest since then. I could speak about other issues, but these were three most important issues for me – higher employment rate, cessation of misuse of the sickness leave and other social allowances, and the well-operating pension system, and that is why I value the work of Minister Nečas so highly. We could speak about the Labour Code; we could mention the fact that the ministry will not return a single euro to Brussels, and that we will completely withdraw means relating to the time period 2004-2006; there were threats that we would not be able to withdraw them. We could also speak about the reduction of the social insurance in the framework of the proposal submitted by Miroslav Kalousek and we could speak on many other issues. But I felt a necessity to highlight those three main issues which Minister Nečas mastered in that one year and a half and I would like to thank him for that.

Jana Bartošová, Government spokesperson: I thank the Prime Minister and now Mr. Petr Nečas, the Minister of Labour and Social Affairs has the floor.

Petr Nečas, Minister of Labour and Social Affairs: Thank you, Mr. Prime Minister. I would like to demonstrate that on some concrete figures which really show that results of the reform steps, which had been taken by the government, are definitely positive and result in very favourable figures concerning the sickness leave. I would like to repeat again that number of sickness leaves dropped by 25%, number of sickness leave days dropped by 11%, and thus economies on the expenditure side took place. According to the records of the Czech Social Security Authority the number of sickness leave days dropped, in case of small firms bellow 20 employees, by 50% in comparison with the last year. There is not reason to suppose that in case of big companies the figure is different, it is just a question of records. In other words, the system definitely stood the test of time, and we expect significant positive effects in connection with the involvement of employers who will cover costs from the fourth to the fifteenth day of sickness. Similarly, we managed to achieve definitely positive results in case of the state social support, as number of allowances paid out dropped by 32% in comparison with the previous year and also 8% economies on the expenditure side occurred. You can see that on the graph in which the comparison of 2006 and 2007 is shown. What I want to emphasize is that the system of the state social support is aimed primarily at families with children and that those catastrophic scenarios of the opposition were groundless. If we examine the data of the Czech Statistical Office on the relation of the net income of employees with children and employees without children than we can see that they amount 60,3% of net incomes of households of employees without children. By the way, it is the second best result since 1993. It means that fears regarding adverse impacts on families with children were groundless. I would also like to point out that the huge increase of social expenditure, which was justified by the effort aimed at aid for families in that pre-election period, resulted in the increase of net incomes only by 0,5% in comparison with families without children, while tax relieves showed much more significant effect. In other words, positive improvement took place. Fears concerning dramatic worsening of the situation of pensioners were found groundless, as well. On the contrary, the relation of their incomes and incomes of households of employees shows that it remains at the level of 82%, it means that it is the same as it was in previous years. Frequently discussed issue was that of pensioners´ expenditures in the sphere of health care. It was shown that in the first quarter of the year those expenditures formed 4,4% of their net incomes according to the Czech Statistical Office. They have grown monthly by less than 100 crowns. We also succeeded in decreasing of total expenditures which concerned allowances related to poverty. The only one exception is the system of contributions to care where huge increase of expenditures took place; therefore we would submit an extensive amendment of the Act on Social Services. As I have already said, the first stage of the pension reform had been passed by the Chamber of Deputies and it was to be debated by the Senate this week, as well as changes in the system sickness benefits. The Act on Employment is being debated in the Chamber of Deputies together with an extensive amendment to the Act on the Aid in Material Need. If I say it in a very simplified manner, it will lead to higher motivation; people will be able to find a job easily and thus to solve their situation. They will work voluntary, of course, and their social allowance will depend on the volume of work done for the benefit of municipalities; allowances will be increased or reduced accordingly. Part of this measure is also the system of "Green Cards". As to what we are preparing, we are preparing the unification and the reform of the medical statement service. We are intensively cooperating with the Ministry of Finance on the second stage of the pension reform and we want to finish the basic thesis by September and the entire law by the end of the year. As to the third stage of the pension reform, we want to prepare the subject-matter of the law by the end of the year so that the articulated version, in case of political consensus of the government coalition, could be prepared in spring of the next year. As early a in this year we want to submit a big family package which will concern in particular the extension of care for children by those persons who are not parents; thus the entire spectrum of care will be extended. It will also concern higher motivation of employers to help and to ensure care for children of their employees. We also want to push through that one-week leave for fathers. As I have already said, we are preparing an extensive amendment to the Act on Social Services, as the increase of social expenditures is huge. I would like to mention three figures. In our budget, expenditures were originally expected at the amount of 8,9 billion crowns; the reality is 14, billion crowns and for this year I expect about 18 billion crowns. I think that it must be clear to every reasonable man that this state cannot continue and that we must prepare certain corrective measure. We would like to submit it in September of this year. We are also preparing an extensive amendment to the Labour Code. One extensive amendment was approved in the last year and it came into force starting from the beginning of this year. We are preparing another one, which is based on the judgement of the Constitutional Court and it concerns certain conception matters that are to be aimed at higher flexibility of our labour market, at our manpower motivation, at encouragement of the labour force mobility, as it was proved that the more flexible the labour market, the lower unemployment. And I would also like to point out that we are preparing a system change of the system of care for endangered children. This system, as it is operating nowadays, it is not a system the Czech Republic could boast of, if I put it an a diplomatic manner. It is rather a system which eliminates us from the main civilization corridor, in which we should move. We have already started certain conception steps. In cooperation with the Ministry of Education, Youths and Physical Training, the Ministry of Justice, the Ministry of Interior, and the Ministry of Finance, we want to present concrete conception changes, by the end of the year, which should be projected to the legislative changes so that a modern system of care for endangered children could be established in the Czech Republic by the end of the election period. The system should be based on a broad political consensus and it should rank the Czech Republic to the relevant level. It is one of key priorities of our ministry and it is also a priority of the government in this sphere and it is supported by the Prime Minister. We want to have a modern system of care for endangered children as they are the neediest; they need our interest and our support and the change of the system most, because the present system should be applied any longer. That was information on key measures which we were preparing. . It means that after measures that have already been pushed through and put in life or which are being implemented at present, we are preparing great number of further concrete steps which are to be put into life by the end of our term.

Jana Bartošová, Government spokesperson: I thank the Deputy Prime Minister and the Minister of Labour and Social Affairs and now there is time for your questions.

Kateřina Krausová, Czech News Agency: Mr. Prime Minister, you said that the Minister mastered majority of problems. Which are problems he did not master? And I would like to ask Mr. Minister if he expected quicker solution of certain problems, for example the pension reform, which had been debated before.

Mirek Topolánek, Prime Minister of the Czech Republic: I think it is the same question. It is a brittleness of this government coalition and complicated situation in the course of passing those legal norms which could not be mastered by Petr Nečas. Certain legal norms face resistance of the part of the public, as well as they face resistance of the public in all countries; nobody wants to lose an advantage, even if it is an undeserved advantage. This is one thing. The second thing is that the struggle with trade unions is intensifying a lot; it became to be very ideological struggle. Trade unions are much closer to the Social Democratic Party. It means that they are something like further opposition party, and this state complicates the negotiations, it complicates rational argumentation. So, if Petr Nečas did not master something, than it is my fault because I am a man who does not like to be extorted; I am of the opinion that in case he had negotiated those issues alone, it would have been negotiated quicker.

Jana Bartošová, Government spokesperson: Thank you.

Petr Nečas, Minister of Labour and Social Affairs: As to the pension reform, I regard as crucial that the first stage is likely to be approved by the Senate in a few days. I regard as important to emphasize that in other Central-European countries politicians did not dare to push through those unpopular issues at all. They implemented certain popular matters such as fund-based pension savings. This was applauded, but they have the house built on instable foundations of running pension system. The question is whether it could have been done quicker. It is true that we had the articulated version of the law prepared as early as in the turn of the first and the second quarter of the last year. Nevertheless, we regarded as our political duty and responsibility to invest part of our time to negotiations with our social partners and with opposition. The fact that the opposition finally did not support this step was sad; nevertheless, what I regard as important is the fact that in case of a theoretical victory of the opposition, and in case the Social Democratic Party becomes a government party, the overwhelming majority of changes will remain unchanged. I think that the value of the dialogue consists in the fact that in spite of sharp criticism, those evil words which Mr. Paroubek likes to say were not said – that after a victory in the election he would abolish those measures. I am of the opinion that this loss of time had its sense. We want to continue this dialogue also in case of further stages of the pension reform, in case of the second and the third stage.

Jana Bartošová, Government spokesperson: Thank you.

Mirek Topolánek, Prime Minister of the Czech Republic: It is necessary to say that it was loss of four-year time, because I have a feeling that what we pushed through now had been agreed with Vladimír Špidla and other partners as early as in 2005.

Petr Nečas, Minister of Labour and Social Affairs: I should say that the pension reform includes number of matters which are beyond the framework of so called Bezděk´s Commission; I must agree with members of the Social Democratic Party in this respect. It includes the principal reform of disablement pensions; it includes more motivation elements for later retirement and such like. The last matter I would like to add is that great number of legal norm of that pension reform is administrated by the Ministry of Finance, not by the Ministry of Labour and Social Affairs.

Jana Bartošová, Government spokesperson: Thank you, further question, please.

Ondřej Šťastný, Mladá fronta Dnes: I have a common question to the Prime Minister and the Minister. I would like to know what will be the response of the government like to that present and rather fierce public and expert's discussion on the care for old and ill citizens in medical institutions. Allow me one more suggestive question. Can you imagine that some of your relatives was placed in such a facility? Thank you.

Mirek Topolánek, Prime Minister of the Czech Republic: I will start. With regard to the fact that my relatives ended their lives in such a facility, both died in 1996 and they had been drawing from the pension system for just a short time, I can imagine what the situation there was like. Since then, since 1996, the situation has significantly improved, and it has been changed. It is connected with our discussion on social services. In the previous election period, with lots of reservation from our side, but with our support, the Act on Social services was adopted and the idea was to transform the institutional system into individual funding of users of the social service. Nevertheless, the present state is double-track; there exist parallel funding – institutional and individual funding. It means that the change we want to make should ensure that providers of social services have funds enough to be able to avoid those excesses, which are currently being nearly systematically sought out. I have visited several institutions; there were tens of them, all around the Czech Republic. I do not want to say that there were fifty of one hundred of them, but there is one problem nowadays which will be solved by the significant amendment to the Act on Social Services. The problem is that seniors should give their contributions to those institutions which provide the respective services. This is the principal problem in my opinion. I do not think that the state is worse in comparison with 1996. But the situation in the LDN (medical institution for long-term patients) in Vsetín has improved, even in Vsetín.

Petr Nečas, Minister of Labour and Social Affairs: I would like to add to this that I could have said that the LDNs came under the Ministry of Health, not under the Ministry of Labour and Social Affairs, but I would not like to simplify the problem like this. The problem, as I am deeply convinced, is a result of three reasons. The first reason is number and quality of staff in those facilities; the number is usually low as the burn-out syndrome is frequently present there. The second reason is the low rate of interconnection of health care and social services systems. I would like to emphasize that that the LDNs are not only providers of social services, except for several exceptions. If somebody wants to be registered as a provider of social services, then the system is quite modern. It means we have systems of standards which a provider is obliged to meet. Unfortunately, the overwhelming majority of medical institutions in the Czech Republic that combine the social care and health care, a typical example is the LDS, is not able to meet standards of social service providers. Therefore, we cannot include them into the register of social service providers. An ordinary hospital and its facility of the LDN type are not able to meet those standards. It is very serious matter and we must produce higher pressure to those facilities to meet those standards. We have introduced a system in the framework of which we want to put every social service provider through an inspection once in two years at a minimum. We are trying to do it in this way. I would like to point out that one of the principal standards which we are trying to push through and which are assessed primarily in case of the LDNs are just relationships with patients and the respect to the human dignity. It is one of crucial standards which we are trying to push through and it would be good to combine the system of health care facilities and social service facilities. The third reason which I want to mention here in spite of the fact that I know that it causes indignation in the Czech Republic, is the failure of families. I know that it is unpopular, but the care for relatives is primarily a matter of a family. Only in case the family cannot provide care, it is the state which is to act, and we should open a public discussion about this issue. We are for example able to cover the part of costs by financial means of relatives, for example children who placed there their parents. In number of cases such a duty is automatic; family members must pay, as it is in case of the duty to support and maintain children. Then it would be logical to introduce similar duty in relation to parents and grandparents. Are we prepared to take this radical step which is deemed to be self-evident in many west countries? A step which would enable funding necessary for high-quality staff and higher number of staff? In other words, I agree with that thesis which was mention in the introduction of one of your articles in the daily Mladá Fronta Dnes, that it is a failure of the state to a certain degree. But I want to emphasize that it is also a failure of family relationships. I do not want to generalize it and to say that it is always like this; similarly I do not want to say that one LDN in the Chittussi Street is a typical LDN in the Czech Republic. I think it is typical as to some aspects but it is not when considering different aspects. A vulgar generalization cannot be applied in this case, but I want to say unambiguously that the care for helpless is not only a matter of the state, or the public sector, but that we must bone up that old truth that especially relatives, a family should be interested in the care and to contribute to it.

Mirek Topolánek, Prime Minister of the Czech Republic: Allow me to say one political sentence concerning this issue. I have understood that open public discussion in media as a kind of pressure to Tomáš Julínek. I perceive it in a different way. It is factual failure of those six or eight, depending if we include also Škromach and Špidla, ministers of health of the last two social democratic governments, because they could have done something with it in those ten years. The situation is better if we take equipment into consideration, but what has Petr Nečas said was absolute truth.

Jana Bartošová, Government spokesperson: Thank you. The last question, please.

Tomáš Drahoňovský, TV Prima: I have a question to the Prime Minister, which is aimed at rather different issue. I would like to know whether you can disclose the reason why you could not attend the Paris summit on the Mediterranean Union. And the second question, whether you regard as a mistake the fact that the country which is awaiting the presidency of the EU, did not have its top representative there, together with Belgium.

Mirek Topolánek, Prime Minister of the Czech Republic: I could disclose the reason but I want, as it is exclusively my personal reason. Yes, that was a decision which I had to take; Karel Schwarzenberg and Alexandr Vonda went there on my behalf. I think it was my personal reason and I will not disclose it. But it was such a serious reason that I had to reduce my programme or to cancel it

Jana Bartošová, Government spokesperson: Thank you.

Journalist: Mr. Prime Minister, my colleague began with it and I would also have a question to you which is aimed at rather different sphere. I would like to revert to the negotiation of the American radar base in the Czech Republic. The life cycle of most of the important anti-aircraft systems of the Czech Army expires. Did not you debate, in the framework of those negotiations, a possibility of any aid from the side of the USA regarding this issue?

Mirek Topolánek, Prime Minister of the Czech Republic: Unlike the Polish minister, our attitude to those negotiations was rather different. We consider this issue as our commitment to NATO and a commitment to our allies. We do not think that we will get armament in return of the radar base. I do not think it would be correct. We regard that framework agreement on the cooperation in the defence industry, science and research as more important and more positive step than buying some armament systems. If we manage to take that step, to cancel the order for 199 transporters and to buy only 107 transporters, then we are able to buy number of systems, whether they would be used by our soldiers in Afghanistan, I mean those light armoured vehicles or some other systems within that amount which had already been earmarked. We have problems neither from the point of view of armament nor from the point of view of finance. If the Army has a need to buy something, to renovate anti-aircraft systems, it certainly included it in its plans and it will certainly realize it using standard measures. We did not include this aspect in those negotiations with Americans.

Jana Bartošová, Government spokesperson: Thank you for your attention. Have a nice day and good-bye.

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