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20. 9. 2007 12:39

Government has approved the state budget

At its yesterday's meeting the Government approved several major items; in this connection we wish to inform as follows:
Ad item 2 - The cabinet has approved the 2008 State Budget of the Czech Republic Bill and will submit it to the Chamber of Deputies of the Czech Republic for discussion. The Bill envisages income of CZK 1,036.5 billion and expenditures of CZK 1,107.3 billion; in 2008 the deficit will thus amount to CZK -70.8 billion, corresponding to public budgets deficit equal to 2.95 % of GDP. The Bill also stipulates as the Government's fiscal objective the proportion of the deficit in GDP equal to 2.3 % in 2009 and 2.1 % in 2010.
In this connection Prime Minister Mirek Topolánek stated: "Most budget-related issues have been clarified during the last week and the Bill was approved unanimously. " Minister of Finance, Miroslav Kalousek, said: "This is the first government that complies with valid law since its adoption and, accordingly, the first government that complies with the mandatory limits imposed on expenditures from the very moment they have become a part of the legal framework of the Czech Republic. All previous governments violated this law."
Ad item 3 - Draft 2008 Budget of the State Fund of Transport Infrastructure: The sum total allocated to the Fund in 2008 equals CZK 88 billion. The draft does not include PPP projects. Item 4 is closely related to the draft budget.
Ad item 4 - Time Schedule of Transport Infrastructure Buildup 2008 - 2013 reflects the fundamental investment and operating needs of transport infrastructure and models the requested resources in individual years. The time schedule is directly related to the draft 2008 budget of the State Fund of Transport Infrastructure and its medium-term outlook. The plan inter alia envisages completion of the D1 motorway Prague - state border Bohumín; completion of motorway D8 between Prague and the state border with Germany; continuing construction of the Prague Bypass; connection of Zlín to the motorway network; construction of a motorway in southern Bohemia. Modernisation of railway corridors is also envisaged; the time schedule reckons with modernisation of the railway junction Brno and with a new line connecting Prague and Beroun including an expensive new tunnel (CZK 20 billion). The segment of waterway transport includes realisation of a weir at Děčín.
Ad item 6 - Proposed Amendment to the Capital Market Trading Act: The Guaranty Fund of Security Traders provides compensation to customers of a trader in securities that is unable, for reasons directly related to its financial situation, to fulfil its obligations vis-à-vis the customers. In the event the Fund becomes insolvent the corresponding obligations pass to the state. A failure to provide financial assistance would entail additional lawsuits against the Fund and increasing amount of delay charges that already represent millions CZK a month. The Fund attempted to obtain funds from loans granted by banks active in the Czech Republic but to no avail; it therefore asked for a non-refundable subsidy from the state. No such subsidy can be however granted under the existing legislation and, accordingly, the Ministry of Finance has submitted a corresponding amendment.
Ad item 11 - Rules Governing Financing Antidrug Policies: The Rules constitute a framework for five subsidy proceedings related to programmes of antidrug policies adopted by the central state administration authorities. New versions aims at re-establishment of the framework and at strengthened co-ordination in allocation of funds from different sources aimed at a uniform antidrug policy of the Czech Government. Issues under discussion included inter alia control of quality of supported services in the field of treatment and subsequent care (certification of expertise, registration of social services providers). In this respect 2008 will become a transition period sui generis; however, in subsequent years a consolidated opinion of the principle "value for money" would have to be reached.
In recent years the sum total of allocated subsidies varied around CZK 200 million, of which the largest proportion (almost one half) was allocated by the Government Council for Antidrug Policy Co-ordination; the balance was administered by the Ministry of Labour and Social Affairs, the Ministry of Foreign Affairs, the Ministry of Education, Youth and Sports, and the Ministry of Justice. The last version of the Rules dating back to 2005 became obsolete both technically (some cash flows have changed in the meantime) and materially (owing to changed conditions governing the subsidies granted by individual authorities).

PR Department, Office of the Government of the Czech Republic

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