Czech President Vetoes Cabinet Bill Aimed at Loosening Budget Responsibility Rules
The veto sends the bill back to lawmakers as critics warn it could weaken fiscal discipline and let the government borrow more.
- Czech President Petr Pavel vetoed a bill easing national fiscal rules, arguing the law threatens long-term sustainability and expands government spending authority without parliamentary approval.
- Lawmakers approved the bill in May, but the Senate overrode the veto earlier this month, including provisions exempting infrastructure projects and defense spending exceeding 2% of GDP from deficit calculations.
- The new bill permits the government to raise spending by up to 10% under "loosely defined security threats," though Finance Minister Alena Schillerova maintains the cabinet will keep the deficit under 3% of GDP.
- A forced vote in the lower house, where Prime Minister Andrej Babis holds a comfortable majority, will determine the bill's fate; an independent budget watchdog criticized the changes as weakening fiscal discipline.
- Under current plans, the deficit should rise to 2.6% of GDP this year and 2.8% in 2027, while Debt would peak at 46.8% of GDP next year, remaining below European Union averages.
15 Articles
15 Articles
President Petr Pavel on Wednesday refused to sign a law loosening the rules of budgetary responsibility. This is the first norm of the Andrej Babiš (ANO) government that Pavel has vetoed. Among other things, the president does not like the fact that the law would make it easier to borrow. The amendment, which was previously returned to the Chamber of Deputies by the Senate, will be discussed again by the deputies.
President Petr Pavel vetoed a law that would allow the government to exceed approved state budget expenditures by up to ten percent in the event of a worsening security situation. The coalition intends to override the presidential veto. TMBK collage for SZ.
The governing coalition of ANO, SPD and Motorists will convene an extraordinary meeting of the Chamber of Deputies to override President Petr Pavel's veto of a proposal that is crucial for the government in drawing up the budget for next year. "Yes, we will convene it for the last week of August, according to a preliminary agreement," Minister of Finance and ANO deputy chairwoman Alena Schillerová told iDNES.cz.
President Petr Pavel returned the Budget Responsibility Act to the Chamber of Deputies. He thus made it clear to the government that he was not satisfied with its idea of public finance management. Would the law open the door to enormous indebtedness? We answer the basic questions.
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