Czech govt OKs steps to cut public finance gaps to 3 pct of GDP

The convergence programme is the country´s basic document for euro adoption which the government submits to the European Commission for assessment annually. This year´s updated version is to be sent by Feb 15.

"The government has approved a programme which shows the effort to consolidate public finances," Fischer said.

According to the programme, the public finance deficit should fall to 4.2 percent of GDP in 2012.

"This means that we can return to the Maastricht criteria in 2013 or 2014," Fischer said.

Last year the public finance deficit rose to 6.6 percent of GDP owing to a record budget gap. In 2008 it stood at 2.1 percent.

As Janota said earlier, specific steps leading to reducing the deficit will have to be applied by the government that will arise from the general election scheduled for spring.

The planned cuts in public finance deficit would make it possible to adopt the euro in 2016 or 2017, Janota said.

The main political parties in the Czech Republic have recently presented their own visions of reducing the public finance gap. The right-wing Civic Democrats (ODDS) want to achieve a 3-percent deficit share in GDP in 2012, so that the Czech Republic could adopt the euro as of Jan 1, 2015.

According to the left-wing Social Democrats (CSSD), the Czech Republic could adopt the euro by 2016 at the latest.

The government interrupted discussion of the updated version of the convergence programme at end-January until today because the ministers wanted first to discuss measures to prevent a further increase in debt.

Author: ČTK
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