It seems that Czech politicians have become again more nervous after their return from summer holidays. Following an unsuccessful voting for one percentage point increase in VAT planned for next year, (1 1400 CZK, 0,88%) Nečas has indicated that he would be ready to negotiate with rebels in his own party and his government would resend this (tax) bill to Parliament again immediately.
This time, however, the government will (together with the approval of the bill) seek a confidence vote in his administration. This will evidently increase political uncertainty as the current right-wing government has only slim majority in Parliament. Nevertheless we still believe that a collapse of the current (fiscally prudent) government is a less likely scenario as rebels in the ruling coalition are not interested in failure, which could eventually lead to early elections (so they would be kicked from Parliament).