14th October 2012

Financial Constitution Approved

The Government approved the so-called financial constitution (the Act on Budget Responsibility, zákon o rozpočtové odpovědnosti) at its session on 11 October. According to the governmental proposal, the Bill should be passed by the Parliament as an organic bill (i. e. approved by the constitutional majority of three fifths of Deputies and an absolute majority of Senators); the Government expects far reaching stability of the Act to be resulting from broader consensus. Sustainability and healthiness of state finance should be stipulated. The financial stability is based on medium-term budget planning. The indebtedness of public sectors should not reach the 60 % of GDP (the so-called debt-to-GDP ratio); reached the 40 % of GDP, the Government should inform the Chamber of Deputies and propose measures to be adopted to remedy the state of public finance. The Government also submits reports of the financial state of public sector to the Chamber of Deputies on regular basis. The National Budget Council that makes budgets and control budget balance should be set up. The Bill stipulates that except for the central level, the regional and municipal levels act financially responsible as well. 
The Bill is heading to the Chamber of Deputies.
For further information regarding the Bill, click here (source: an explanatory report and a proposal of the Bill).

Members of the American Chamber of Commerce in the Czech Republic