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State budget defers the pain

Schools, green spaces and arts benefit from voter-friendly plan

By Andrew Steven Harris
Staff Writer, The Prague Post
September 14th, 2005 issue

Education, the environment and culture will get significant cash infusions next year as part of the 2006 state budget unanimously endorsed by the Cabinet, a financial plan shaped to the contours of next year's parliamentary elections.

The plan, submitted by the government to Parliament for approval Sept. 7, edges state spending close to the 1 trillion Kč mark, with nearly 960 billion Kč ($41 billion) in expenditures, an increase of about 5.5 percent over the previous year.

Facing a national election next summer, Cabinet members seemed reluctant to curtail spending, using the surplus created by the currently robust economy to back a range of popular programs rather than commit additional funds for deficit reduction.

Among expenditures getting a boost is education, which will receive more than 6 billion Kč over last year's allotment, in part to reform public universities and improve teacher salaries, two policies championed by retiring Education Minister Petra Buzková of the senior ruling Social Democrats.

"The budget clearly showed that education was the government's priority," Buzková told reporters. "Its increase will be very noticeable."

New Culture Minister Vítězslav Jandák also successfully argued for an additional 326 million Kč over last year, reversing a trend since 1989 in which funds for culture have steadily declined. Last year, excluding expenditures on churches — which the state has administered since they were seized under the pre-1989 regime — cultural spending fell to less than 0.5 percent of the budget, less than half the spending of most other European Union nations.

The Environment Ministry also received a boost of 80 million Kč in compensation for farmers in the Natura 2000 European wildlife preserves, with a reserve of 70 million Kč for future problems and water monitoring.

Budget authors project next year's deficit at 74.4 billion Kč on revenues of 884.4 billion Kč, though Cabinet members note that this itself represents a reduction of more than 9 billion Kč from this year's shortfall. Finance Minister Bohuslav Sobotka also asserted that the deficit would likely shrink further as the economy thrives.

Overall, analysts project the deficit at only 3.7 percent of the state's gross domestic product — well within the range set by the EU for nations looking to adopt the euro, as the Czech Republic plans to do by 2010.

Andrew Steven Harris can be reached at aharris@praguepost.com


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