The fiscal pact is one of the talismans of the coalition government’s new pro-European stance. But it’s not a done deal that it will get the votes needed in parliament to go through and former finance minister Miroslav Kalousek has just signaled that TOP 09 votes in support will not be coming cheap.
So, former finance minister and deputy leader of the TOP 09 party, Miroslav Kalousek, has not been looking too happy in his ‘out of office’ mode recently. After all, he has been wedded to power for most of the last decade and a half. Nevertheless, Kalousek is still the vociferous opposition voice when it comes to financial matters and maintains a potent capacity to make mischief.
The proof of that was his latest move to offer TOP 09 support for Czech adoption of the European fiscal pact and for the upcoming government budget and all the following ones as well. There is, of course, a condition: and that’s that the government immediately accepts the financial discipline of Europe’s fiscal pact in the upcoming budgets.
That’s clearly a non-runner, especially for the prime minister and coalition government’s main party, the Social Democrats. The coalition is happy to adopt the tougher budget discipline of the fiscal pact, but on the understanding that it applies to the next government in power and not this one.
In the meantime, the Social Democrats want to keep at least some of their 2013 election promises by putting more money into the previously squeezed public sector, particularly such services as education and the health service. ANO leader and finance minister, Andrej Babiš is prepared to relax the purse string for infrastructure investments, such as road and rail transport, which he argues can make the country more competitive.
So Kalousek’s offer will fall on stony ground. But that still leaves a big question about the Czech adoption of the fiscal pact itself. Just a short recap, the fiscal pact lays down stricter budget discipline than the previous Maastricht euro adoption guidelines, though it gives countries a bit of leeway if extra spending is needed during an economic downturn. All EU countries had said they would sign up to the discipline apart from the Czech Republic and Britain.
The problem for Czech adoption is that the legal experts advising the government reckon that the move will require a so-called constitutional majority, or three-fifths of both the lower and upper houses of parliament. Prime Minister Bohuslav Sobotka’s coalition has a handsome 111 seats in the 200-strong lower house but this still falls well short of the two-thirds total.
In theory, the pro-European TOP 09 would be expected to line up and vote for the fiscal pact but Kalousek is clearly only willing to offer his party’s votes for a price.
Both the Civic Democrats (ODS) and Communist Party of Bohemia and Moravia are fiercely opposed to the fiscal pact and Tomio Okomura’s Dawn Party has also denounced it. So the coalition looks like it is coming up short on votes to get this bit of legislation through if Mr. Kalousek wants to play hardball.