The new coalition Cabinet (including the Social Democrats, the Christian Democrats and the Freedom Union) led by Social Democrat PM S. Gross approved its program yesterday. As the make-up of the Cabinet has not significantly changed, the program will result in only insignificant changes to recent government policy. No major pension- or health-system reforms are scheduled, and no considerable changes to the revenue side of the state budget are expected either (excluding the already announced excise tax increases). In line with the previous fiscal strategy, the budget deficit should decline to 4% and 3% of GDP by 2006 and 2008 respectively. The Cabinet is scheduled to ask Parliament for a vote of confidence on August 24; given its narrow majority of 101 out of 200 MPs, it is expected to gain confidence.
Jan Hájek, Patria Finance