Prague- In a vote seen as an endorsement of Prime Minister Jan Fischer's caretaker government, the Czech parliament's lower house on Thursday approved an austerity package aimed at narrowing the country's budget gap. The package's adoption makes it possible for the interim government to remain in power, allowing it to prepare a belt- tightening budget for next year that takes account of effects of the global economic crisis.
Lawmakers passed the measure 163-26, after days of intense negotiations and bitter squabbling over various proposals.
Fischer said Thursday that he would consider the lawmakers' failure to adopt the cuts an expression of no-confidence in his technocratic cabinet.
The package is to squeeze the deficit to 162.8 billion koruna (9.5 billion dollars), or 5.2 per cent of gross domestic product (GDP) in 2010, Finance Minister Eduard Janota said before the vote.
Without the measures, the deficit would swell to 7.4 per cent of GDP, which could threaten the Czech Republic's public finances, the Finance Ministry had warned.
The package achieves its ends through a compromise mixture of tax hikes and spending cuts.
"It was a painful decision, and the package's impact will be painful," Fischer told the chamber after the vote. "It is simply a well-dosed therapy that will hurt next year so we avoid pain in the years to come."
Approval of the package allows the country to escape the threat of entering next year with an emergency budget based on revenues and expenditures for 2009.
In a separate vote, the 200-seat house agreed 182-2 to cut by 4 per cent civil servants' salaries, including their own.
Fischer's caretaker cabinet was originally set to remain in office until a snap poll in early October, which was recently canceled by the country's Constitutional Court.
The prime minister has said he wants a renewed, stronger mandate in order to stay in power until a regular general election, which must take place by June 2010.
Political leaders agreed to hold the annulled October poll after the centre-right cabinet of former premier Mirek Topolanek fell in March, midway through the Czech Republic's half-year term at the helm of the European Union.
But the top court ruled on September 10 that the law that enabled the election was at odds with the constitution.
The budget-cutting measures approved by the lower house Friday require upper house and presidential approval.
