Czech 2010 deficit can be 5.1 % of GDP

Czech 2010 deficit can be 5.1 % of GDP

The European debt crisis appears to have entered into its second stage, with Ireland asking for an IMF and EU-backed bailout. Although markets calmed after the bailout was announced, attention is now directed at the Iberian Peninsula which hosts other “sick men” of the euro-zone whose fiscal health is seen as questionable – Spain and Portugal.

Meanwhile, the Czech Republic, which is not an euro-zone member, promises a more healthier outlook. Or, at least according to its Finance Minister Miroslav Kalousek from the conservative TOP 09.

In the best-case scenario, the 2010 deficit will equal 5.1 percent of the Czech Republic’s GDP, Kalousek Said on Sunday in a weekly political discussion program Otázky Václava Moravce broadcast by the public-service Czech Television.

However, Kalousek admitted that currently he can only affirm that the deficit will not be larger than the approved CZK 163 billion (EUR 6.5 bil), or 5.3 percent of the GDP. But the minister believes that the deficit will be smaller than that, although “not dramatically”. “If it will not be 5.3 percent, it will be 5.2 percent, or in the most optimistic case, 5.1 percent,” Kalousek said.

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In addition, Kalousek said that he wants to suggest to the government to allow Czech ministries to use expenses they currently cannot use because of a possible fiscal problem.

However, out of the CZK 28 billion (EUR 1.12 bil) reserved in this way, only hundreds of millions will be used. “It will not be even one billion Czech crowns,” Kalousek said.

In 2011, the budget deficit should surpass 4.8 percent of the GDP, or CZK 135 billion.

Read more: 2011 budget: Czechs living more and more beyond means
Read more: Czech government approves austere budget and tax hikes


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