The question is, however, how much the cash-strapped state will have to pay this year for its 2006 holiday spending spree.

The Chamber of Deputies quickly approved the increase Dec. 13, despite expecting the third-highest budget deficit in the country's history, at 91.3 billion Kč. But, in doing so, the deputies used money both from budgetary reserves and funds set aside for mandatory expenditures — from pension payments to funding health insurers.

Some ministers accused the Chamber Deputies of robbing Peter to pay Paul. Labor and Social Affairs Minister Petr Nečas said the government will be short some 950 million Kč that it will need for mandatory expenditures at the end of 2007.

Vlastimil Tlustý was so bothered by the spending that he became the first finance minister who did not vote in favor of an annual budget in Parliament.

"I simply could not support such an increase of the deficit," he said.

Tlustý said the move is likely to increase the state budget deficit by another 6.4 billion Kč, which has prompted some economists to suggest that the overall state budget deficit could hit 110 billion Kč by the end of 2007.

Those who will profit

Despite winning the general elections last June, the right-of-center Civic Democratic Party more or less adopted the budget drafted for 2007 by the left-leaning Social Democrats. Pre-election promises to pay extra subsidies to different groups made it impossible to reduce the deficit, even given the continued growth of the country's economy.

Schools and sporting facilities will get an additional 4.5 billion Kč in 2007 from both the budgetary reserves and the state's Dec. 13 bonus. Another 3 billion Kč will go to homes for pensioners and disabled people, and farmers will get an extra 2 billion Kč in subsidies.

Furthermore, pensioners, families with children and state employees will receive more money from state coffers in 2007.

But, while certain groups stand to gain from the increases, most economists agree that the increases will hurt the state in the long run.

"If the management of a private company behaved in this way, it could be accused of mismanagement of entrusted assets," said Pavel Sobíšek, chief economist at HVB Bank. "The Chamber's budget committee should dissolve itself."

Pavel Mertlík, chief economist at Raiffeisenbank, said it was ridiculous that the government turned into a big spender as the economy grew. He also noted that the state counted the expected income from the possible sale of a minority stake state-controlled power company ČEZ as budget revenue. Such accounting runs counter to international standards, Mertlík said.

Should the government continue increasing expenditures at the currently pace, it will need to raise taxes in two years, according to Aleš Michl, another Raiffeisenbank economist.

Euro no go

The spend-happy state has been the driving force behind the country delaying euro adoption by 2010.

According to the Maastricht criteria, which set basic qualifiers for adopting the single European currency, the share of the state budget deficit cannot exceed 3 percent of the country's gross domestic product. Nevertheless, the rising 2007 budget deficit is likely to amount to about 3.5 percent at the end of the year and it could rise to some 4 percent with additional spending factored in, Michl said.

The European Central Bank expects that number to hit 4.1 percent this year.

The government agreed with the Czech National Bank last spring to postpone euro adoption until 2012, but Michl insists that speculating on when the euro will be spent in the Czech Republic is pointless given the current political climate.