Czech Parliament Approves Budget with 252 Billion Deficit in First Reading

The Chamber of Deputies approved the basic parameters of the state budget for next year on Wednesday evening after a full day of discussions. The budget foresees a deficit of 252 billion Czech crowns. The opposition criticized the government for the actual deficit being higher than the cabinet admits. The proposals to reject and revise the budget were unsuccessful for ANO and SPD.

“We are reducing the overall expenses of the budget, slightly increasing the revenues, and reducing the deficit of the state budget by 42 billion Czech crowns. Not only me but all members of the government consider this budget proposal to be good, balanced, and realistic,” said Finance Minister Zbyněk Stanjura (ODS) on Wednesday during the plenary session.

In the first reading, the deputies approved the basic parameters such as revenues, expenses, the deficit, and its settlement method.

The planned revenues will increase by 12 billion to 1.94 trillion Czech crowns compared to this year’s budget. On the other hand, planned expenses will decrease by 31 billion to 2.19 trillion Czech crowns. The budget deficit will be 252 billion; initially, the government representatives promised 210 billion. This year, a deficit of 295 billion is expected.

87 deputies out of 156 present voted in favor. Representatives of both ANO and SPD from the opposition voted against, with 69 dissenting votes. ANO and SPD also failed with their proposed resolutions to reject the proposal and send it back to Stanjura for revision. In the second reading, the deputies cannot change the basic parameters. They will only propose transfers within the budget.

The discussion proceeded without traditional obstructions and long speeches. Approximately twenty deputies spoke. For the opposition ANOs, most of them were shadow ministers who expressed their views on the planned budgets of individual ministries. Members of the government often engaged in discussions with them.

Opposition: Manipulated Numbers and Shortcomings

Opposition deputies from ANO and SPD repeatedly criticized the planned deficit. For example, according to the head of the ANO parliamentary group and former Minister of Finance Alena Schillerová, the proposal for the state budget does not correspond to reality because, in her opinion, the revenues are overestimated, and the government counts on finances that will not be collected due to subsidy cuts. She also believes that the deficit will be higher in reality than openly acknowledged by the government.

“The actual deficit of the state budget is already proposed at 270 billion Czech crowns. The only question is whether it will be visible in the deficit. It is the pinnacle of budgetary magic by the government of Petr Fiala, shortsighted criticisms that will come back to us next year, with interest,” Schillerová said on Wednesday.

Similarly, SPD leader Tomio Okamura also criticized the government. “We do not know the actual deficit because the numbers are manipulated to make it as low as possible, even though it is still astronomical. It means that the debt will be even larger than the government announces. They save in places where they shouldn’t, and under the pretext of savings, they deprive people and companies,” said Okamura, who also criticized the planned loan from the EU not included in the deficit.

Deputy Speaker of the Chamber of Deputies and Shadow Prime Minister Karel Havlíček (ANO) not only criticized the financial framework but also expressed concern that President Petr Pavel did not attend the initial budget meeting in the Chamber of Deputies, unlike his predecessor Miloš Zeman, who did so in recent years by his own will.

Although the budget passed in the initial round, some coalition deputies are not entirely satisfied with it. Before Wednesday’s discussion, they said they preferred a lower deficit than the agreed-upon 252 billion.

“I would certainly be much happier if the budget for next year were prepared and approved with a lower, originally planned deficit of 210 billion Czech crowns,” admitted Deputy Speaker of the Chamber of Deputies and economist Jan Skopeček (ODS).