Czech Government Puts Together Austerity Package

The austerity package that Prime Minister Petr Necas wants to introduce with his fellow party members in the conservative ODS includes significant cuts and reductions for the country’s citizens: for example, they will have to accept cuts to sick pay. Under the package’s plans, a birth grant will be paid only for the first child, and only if the family’s income does not exceed a certain ceiling. But it is not only the public who will face cuts; politicians will also have to accept reductions in their allowances. To save money on politicians, their salaries will be cut by five percent. People employed in the Czech public sector must expect cuts of around ten percent to their wages and salaries.

Home savers also affected by the new austerity package

For home savers in the Czech Republic, the government’s new policy means that, in 2010, proceeds from home savings and the state subsidy will be subject to a one-time tax of 50 percent. This tax will be abolished next year, but state support for home savings will also be cut by a good 30 percent.

The austerity package drawn up by Prime Minister Necas and his government can only be implemented once it has been approved by the Senate. This is already considered a certainty. The Social Democrats (CSSD), in the Czech opposition, plan to file a complaint with the Czech Constitutional Court because the government had the austerity package reviewed under an accelerated procedure.