New ministers reveal strategic goals

18-07-2002

As the new Czech government was sworn in on Monday, ministers have started to reveal their main policy goals. The new cabinet pledged to lead the country into the European Union and its policies will have to be subordinated to this goal. The new team will also have to start tackling problems that their predecessors either failed to resolve, ignored or exacerbated by their policies, mainly in the economic sphere. Vladimir Tax reports.

The new Finance Minister Bohuslav Sobotka said his foremost priorities included reform of public finances and the preparation of the country for the adoption of the single European currency. Reform of state expenditures has been much called for to stop the ever widening deficit of public finances.

Mr. Sobotka suggests that by the end of 2002, the government should adopt a four-year budget outlook that would include set expenditure limits for all budget chapters so that the public finance deficit decreases to around 5 percent of GDP by 2006. In Sobotka's opinion, faster reduction of the gap would be economically and politically unrealistic.

Mr. Sobotka also said he would accept a reduction of the corporate tax but he also admitted there could be a rise in the personal income tax and indirect taxes.

Bohuslav Sobotka replaced former finance minister Jiri Rusnok, who has become Industry and Trade Minister. Mr. Rusnok promised to breed positive environment for investment, support export and entrepreneurial activities. As the main tasks ahead he sees a completion of restructuring of the steel industry, putting the Temelin nuclear power station in full operation and a revision of a development strategy for the energy sector. In an allusion to overly ambitious and often criticised plans of his predecessor Miroslav Gregr, Mr. Rusnok said he was not planning any industrial "big bang".

In the transport sector, minister Milan Simonovsky will have a simpler agenda than his predecessors - what was until now the ministry of transport and communications has become a ministry of transport and the division of communications was assigned to a newly established ministry of information technology. Yet the transport minister is facing the difficult tasks of improving the financial situation of Czech Railways and transforming the company.

The new Minister of Agriculture Jaroslav Palas says he has two main aims - the integration of the Czech agricultural sector into the European Union, and the stabilisation of prices of agricultural products on the domestic market. Mr. Palas would like to negotiate "approximately" the same benefits for Czech farmers as those enjoyed by their EU counterparts. Commenting on the decline of domestic food prices, especially wheat, pork and poultry, Mr. Palas said the State Agricultural Intervention Fund could help, although its resources are limited.

18-07-2002