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Czech Republic: Prime Minister Announces Austerity Measures

  • Jolyon Naegele

Prague, 16 April 1997 (RFE/RL) - Czech Prime Minister Vaclav Klaus today announced that the three ruling coalition parties have reached agreement on measures intended to make what he terms "corrections" to the Czech economy. The measures include slashing budget outlays by five percent, which would appear to be the equivalent of nearly $900 million. Klaus says the measures will slow down what he calls a "certain unevenness in the economy" to turn the economy around and set it growing.

Civic Democratic Alliance chairman Michael Zantovsky told reporters after the meeting the short-term economic measures agreed upon today will be painful but unavoidable, while long term changes are intended to revive the economy and as he put it "strengthen the rule of law."

Similarly, coalition partner Christian Democrat leader and Agriculture Minister Josef Lux says the short-term measures are aimed at restructuring and equalizing inequalities. He says the measures will "affect every citizen in the country and must also affect the government." He says that although personnel changes were discussed, no agreement could be reached.

Klaus insists the changes do not represent a change in the government's views on the relationship between the citizen and the states, or the free market or state intervention.

His comments came as his cabinet continued to finalize the package of economic austerity measures, which will be announced shortly.

Remaining unresolved issues include a system of import deposits intended to stem the growing foreign trade deficit, which last year more than doubled to just under $6 billion.