A group of rebels from within the ruling Civic Democratic Party will not
vote for the government’s tax package unless it is changed so that taxes
are not raised, the group´s informal leader, MP Petr Tluchoř, said on
Monday. He did express confidence an agreement on the legislation could
still be reached. In his view, there is a “broad consensus” within the
party that taxes not be increased; he also rejected the notion the rebels
were trying to subvert the government, which has linked the tax package to
a vote of confidence.
A party working group will discuss the package again on Tuesday morning before meeting with the deputies’ group. Until now the government has maintained the a proposed VAT hike is essential for it to meet its fiscal target in 2013 – to lower the gap in public spending to below 3 percent of GDP. In view of the fact that no compromise has been reached yet, there have been calls from within the party for the vote on the crucial bill to be postponed until after the Civic Democrats’ party conference in early November.
The General Inspection of the Security Services has recommended that former police president Petr Lessy face prosecution, the spokeswoman for the Prague state prosecutors’ office has said. The General Inspection has been investigating the former police head since late August for alleged libel and abuse of public office. The spokeswoman on Monday declined to discuss whether the nature of the charges had changed; she said a state prosecutor was going over the case file at present. If the case goes to court and Mr Lessy is found guilty of libel and abuse of office, he could face up to three years in prison.
A hospital in Prostějov registered a new case of methanol poisoning on Monday, admitting a 48-year-old man in serious condition. In the Olomouc region, it is the sixth case of methyl poisoning since an outbreak related to bootleg liquor began in the Czech Republic in mid-September. Thirty people in the country have died as a result of drinking laced alcohol: two men succumbed to poisoning last Friday.
A new poll released by the CVVM agency has suggested that if the national election were held ‘next week’, it would be won easily by the Social Democrats. According to the survey, the leftist party would secure 33 percent of the ballot, followed by 22.5 percent for the Communist Party. The right-of-centre Civic Democrats would come in third with just 16.5 percent. Other polls have also suggested a rise in voter preference for the oppositon, along with a marked drop in support for the coalition leader. If the election were held next week, the survey estimates that 58 percent of voters would take part.
After carrying out an audit at the Education Ministry, the Czech Supreme Audit Office (NKÚ) announced on Monday that the funding requirements for public universities set by the ministry were too lax. The audit of funded projects from 2006 to 2011 revealed that as a result some projects went over budget by as much as 100%. Out of the 14 projects controlled by the office, five were found to be problematic. In many cases, NKÚ has claimed, the ministry did not require the recipients to evaluate the effectivity of the investment in their project applications. The ministry recognized that overspending was registered in some projects from 2003 to 2006, but that later the requirements were made stricter.
The Social Democratic party’s candidate for president, Jiří Dienstbier, has surpassed the minimal 50 thousand signatures needed to run. Mr Dienstbier opted to gather the necessary signatures even though he is guaranteed backing from enough party MPs and senators as his party’s nominee. Others who have met the necessary requirement, or passed the threshold, are former prime minister Jan Fischer (who remains a strong favourite, according to polls), politician Jana Bobošíková, Euro MP Zuzana Roithová, former prime minister Miloš Zeman, and former finance minister Vladimír Dlouhý.
Finance Minister Miroslav Kalousek has told journalists that if revenue
from the planned autumn issue of retail bonds topped 10 billion crowns,
issue would be a success. Investors will be able to order state bonds from
November 5 to November 30. The period, however, can be shortened by the
Finance Ministry. The ministry will also offer a premium bond with a
three-year maturity and annual average yield of 2.77 percent. The bonds
will be distributed through branches of postal service operator Česká
pošta and of banks Česká spořitelna, ČSOB, Komerční banka and
The first retail bond issue took place a year ago and investors ordered over 20 billion crowns worth of bonds; the spring issue this year generated around 15 billion. Bonds were available for both Czechs and foreigners, civic associations, foundations and churches, among others, and in the spring also included regions, towns and public universities.
Czech banks tightened credit standards overall for corporate loans and loans for house purchase in Q3 2012, while leaving them unchanged for consumer loans, according to the Bank Lending Survey published by the Czech National Bank (ČNB) on Monday. The tightening of standards for both corporate and housing loans was due mainly to perceptions of risks relating to expected general economic activity and manifested itself during the approval of loans chiefly via a higher collateral requirement for corporate loans and a rise in margins, the national bank said. The demand for corporate loans and loans for house purchase declined. By contrast, demand for consumer loans increased, the central bank said. In Q4, banks expect credit standards to tighten for corporate loans and to ease for loans for house purchase. According to banks, demand for corporate loans should continue to fall. On the other hand, banks expect demand for loans to households to rise, the survey suggests.
Analysts say the constitutional majority of left-wing parties in the Senate may slow down reforms but will not influence the country’s overall direction. Unicredit Bank analyst Pavel Sobíšek said the left-wing parties§ strengthened position in the upper chamber would start to be important if the same result were attained in the lower chamber after the next general elections. At present the Senate can only veto bills which the lower house has the power to override. Although the result of the Senate elections has further polarized the two chambers of Parliament there are no fears that this could influence investors who are far more sensitive to the political make-up of the lower house.
The speaker of the lower house, Miroslava Němcová, has said the government’s tax package must win approval by November 7th for next year’s state budget to be approved in time. The package of government proposed tax hikes is being blocked by six deputies from the prime minister’s own Civic Democratic Party who are against tax hikes in principle and argue that the party should respect its election promise to voters. The government claims the proposed VAT hike is essential for it to meet its fiscal target in 2013 – i.e. lower the gap in public spending to below 3 percent of GDP. In view of the fact that no compromise has been reached there have been calls from within the party for the vote on the crucial bill to be postponed until after the Civic Democrats’ party conference in the first week of November. The vote is scheduled to take place at a session of the lower house due to start on Tuesday.