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10 December 2013

NYT: Czech parties reach deal to form centre-left government


The Czech Republic's Social Democrats reached a coalition deal with two other parties late on Tuesday, agreeing to leave taxes on companies and high earners unchanged next year to help clear the way for a centre-left government to take power.

The leftist Social Democrats, winners by a slim margin of an October parliamentary election, are looking to return to government for the first time since 2006 in a coalition with the centrist ANO movement and the Christian Democrats. Social Democratic party chairman and likely next prime minister, Bohuslav Sobotka, and the deputy leaders of the other two parties said the parties would give final details of their coalition agreement later in the week when they unveil their programme. The parties have aimed to wrap up coalition talks in the next week so that Sobotka could present his government to President Milos Zeman by the end of the year.

Tax policy had been the main sticking point in coalition talks, with ANO, founded two years ago by billionaire businessman Andrej Babis, opposed to higher taxes. Sobotka said some tax changes could come in 2015. Anti-corruption movement ANO's opposition to tax rises has pushed the Social Democrats to back off plans for now to lift taxes for banks, telecommunications companies and utilities to boost budget revenue. Sobotka said the question of a so-called sector tax was addressed in the coalition deal but did not give further details. ANO surged in the polls this autumn and finished a strong second in the October vote, winning voters that had in the past supported more established centre-right parties.

The centre-left parties have agreed to keep the central European country's budget deficit below the European Union-prescribed limit of 3 per cent of annual economic output but also want to boost spending to help the recovering economy.

Full article



© New York Times


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