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Czech left opposes airport sale,urges more welfare

Published 03/25/2009, 12:11 PM
Updated 03/25/2009, 12:16 PM
TTEF
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By Jana Mlcochova

PRAGUE, March 25 (Reuters) - The Czech leftist opposition proposed to halt privatisation of Prague Airport on Wednesday and called for an extraordinary parliament session for next week to debate measures to battle the financial crisis.

The move came a day after the opposition Social Democrats, along with rebel government deputies, overthrew Prime Minister Mirek Topolanek's centre-right minority government, undermining policymaking in a sharp economic downturn and halfway through the country's EU presidency.

But it was not clear whether the rightist rebel deputies would also provide support for the opposition's proposals including higher taxation and welfare.

The parliament remains split with neither the government nor the opposition commanding a majority. The government will stay in place until a new administration is appointed or until an early election.

"I am convinced that a government in resignation should not make irreversible steps in selling state property and it should cancel or halt some big tenders," Social Democrat party Deputy Chairman Bohuslav Sobotka told a news conference.

"What I mean is that the government should halt the sale of the Prague airport."

Privatisation is a matter falling within the executive powers of the government. A special law would have to be adopted to halt specific sales such as the airport deal. The process of selecting a sale adviser is in its early stages.

The government is hoping to get 3.5 billion euros for Prague airport, although the expectations have soured with the continuing economic downturn.

Sobotka said pending privatisation of flag carrier Czech Airlines (CSA) was "doomed to failure" as the economic downturn meant there were few bidders, limiting the scope of competition.

The finance ministry concluded the first round of the CSA tender on Monday, receiving four preliminary bids. [ID:nLN453163]

Sobotka said the party would propose a 45 billion crown ($2.22 billion) stimulus package including measures such as a scrappage subsidy for old cars, a cut in the value added tax on some items such as food, a rise in tax benefits favouring low-income earners, hikes in welfare payments including unemployment benefit, and higher taxes for the wealthy.

The government had partially enacted a package worth 73 billion crowns, which it said would provide a stimulus to the economy equal to 4.7 percent of the country's total output or 180 billion crowns after an expected multiplication effect.

The government's package was mainly aimed at freeing up cash flow and credit, and contained no big demand stimuli.

The Social Democrats oppose most of the government's anti-crisis measures, mainly the reduction of social tax payments by employers, which the cabinet has yet to push through the parliament.

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(Editing by Stephen Nisbet)

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