Thursday, July 09, 2009

Klaus vetoes scrappage fee etc.

Czech President Václav Klaus has vetoed the socialist-sponsored bill that was marketed as an anti-crisis package. The most visible part of the bill was a USD 1,500 scrappage fee, a government subsidy meant to speed up the new car sales (that is already at work in several EU countries). The bill also wanted to extend the period when the people can be supported in unemployment.

Klaus has explained that the proposed policy was non-systemic, discriminatory, and plagued by legislative errors. The regulation would add another layer of garbage to our legal system that is already contaminated by lots of weeds. The bill guaranteed no positive effects for the Czech economy - because people can buy foreign cars, too, a fact that Germany has already experienced in practice.

Concerning the discrimination, Klaus said that the lobbyists who work for a few car companies would be getting an undeserved advantage over many other sectors of the economy that don't have such powerful (or any) lobbyists. Legislative errors include a doubled, redundant policy about a faster amortization: an identical regulation has already become the law a week ago. Detailed policies describing what's needed for some subsidies have not yet been written.

The bill would also add a few billions of dollars to the budget deficit - which is expected to be at relatively modest 8 billion U.S. dollars - which is still way above the previous "balanced" years.

In this particular case, it is widely expected that the Parliament with its 200 deputies has almost no chance to collect the 101 votes needed to overrule the veto: only 82 of mostly left-wing deputies supported the bill and it only passed because the center-right deputies left the room, as a result of an agreement.

According to the website of the Czech public TV, 77.5 percent of the readers "definitely" agree with Klaus's veto and additional 3.5 percent "softly" agree with him. That brings the total support of Klaus to 81 percent. But yes, this number may be skewed by the fact that illiterate and uneducated voters are less likely to be able to open internet pages and more likely to support the social democratic party and its irresponsible games.

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