Czech President Vaclav Klaus appointed Jan Fischer as a new Prime Minister of the country. Jan Fischer is not connected with any political party. He is seen as a pure technocrat who should finish EU presidency and prepare the country for elections planned for October. In practice, we can expect an economic policy to be driven by ODS and CSSD in months to come.
So far, they reached an agreement about a joint fiscal stimulus. ODS together with two smaller parties (Christian Democrats, Greens) pushed through their flagships: lower social security contribution for low-wage workers and faster write-offs/amortization for companies. CSSD insisted on car-scrapping subsidies, lower taxation of families with children, higher unemployment benefits and child allowance. All measures should be in place until the end of 2010, only timing of car-scrapping subsidies is left to be decided later.
(37,06 EUR, 1,76%) costs sum up to CZK 40-45bn lifting the budget deficit to CZK 175-180bn (4.8% GDP) this year. (1399 GBp, -0,07%) year, the deficit can attack a threshold of CZK 200bn (6.0% GDP), if all discussed measures would be approved.