German fiscal discipline is example for Czechs to follow - FinMin


12.05.2014 17:38

Berlin - Germany´s fiscal discipline is an example for the Czech Republic to follow, Czech Finance Minister Andrej Babis (ANO) told Czech journalists after meeting his German counterpart Wolfgang Schaeuble in Berlin today.


Ministr financí a šéf hnutí ANO Andrej Babiš. ČTK Šulová Kateřina, ČTK

He said he hopes that the Czech Republic, too, will succeed in achieving a state budget without a deficit in the future.

Under the framework legislation approved this year, Germany´s state budget is to be balanced next year, for the first time since 1969.

"Germany is an example for us to follow and I hope that one day the Czech Republic, too, will achieve a balanced budget and forget about the practice of viewing budget gaps as normal. Because a deficit is not normal, we cannot live based on an increasing debt," Babis said.

A policy of debts is a path to hell, he added.

Babis, one of the richest Czechs who owns the giant Agrofert holding, said the Czech Republic suffers from shortcomings in the collection of taxes.

"About 200 billion crowns flow abroad every year," he said.

The government wants to take measures to improve the tax collection, such as an electronic evidence of revenues from sales.

"As everything takes horribly long in this country, the effect of the planned measures can be expected only in late 2015 or in 2016," Babis said.

He said he is convinced that the Czech Republic will manage to keep the state debt on the level of the end of 2013.

Babis and Schaeuble discussed the situation in the euro zone and the fiscal compact which Prague joined earlier this year.

Schaeuble did not push for the Czechs to introduce the euro, Babis said and added that he does not expect this to happen in the foreseeable future.

"I think the euro is not a topic on the Czech agenda now. We have not our budget adjusted accordingly, and I also think we do not need it since our banks are in a very good condition," Babis said.

Nor does he see any reason for the Czech Republic to join the banking union. Czech banks´ condition is the best in Europe and the Czech National Bank´s (CNB) supervision of the banking market works satisfactorily, Babis added.

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