Chamber of Deputies Approves Extension of State Deficit To Fund Extra Costs Due To War in Ukraine

The Chamber of Deputies has approved a proposal by Petr Fiala’s government to increase the state budget deficit for this year by CZK 50 billion in response to extraordinary financial pressure on the Czech economy related to the impact of the Russian invasion of Ukraine. Photo credit:

Czech Republic, July 31 (BD) – The government has discussed and approved an amendment to the state budget law for 2022. The Chamber of Deputies approved an increase in state budget revenues this year by CZK 65 billion and expenditures by CZK 115 billion, increasing the state budget deficit by CZK 50 billion, to a total of CZK 330 billion.

“Within months of its appointment, our government managed to rework the draft state budget prepared by the previous government of Andrej Babiš to reduce unnecessary spending,” said Fiala. “We reduced the deficit prepared by Andrej Babiš’s government by CZK 100 billion. At that time we did not yet know how these savings would be useful in the following months. We could not have known that a few weeks later a war would break out 300 kilometres from our borders, unleashed by Putin’s Russia. The military aggression is directed against Ukraine, but in the field of energy, economy and other areas Vladimir Putin is waging a war against the entire Western world.”

The government used the increased spending mainly for measures to assist citizens and businesses. Compared to the original budget, there is CZK 115 billion extra this year and another CZK 51 billion that the government plans to allocate to finance the austerity tariff next year. “This money goes to help citizens and businesses,” said Fiala, listing the triple increase in pensions this year, the austerity tariff, family allowances, the reduction of excise taxes on diesel, and other measures that the government is taking.

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The government discusses the state budget and the various proposals brought to the floor by the ministries. Improvements are planned in the fields of transportation, industry, defence, and finance. Photo credit:

The Council of Ministers also approved a draft amendment to the Law on Land Roads and other related laws, which aims to change the legal personality of the Directorate of Roads and Highways of the Czech Republic from a contributory organisation of the Ministry of Transport to a state enterprise. The cost of the transformation is estimated at CZK 50 million.

The Ministry of Industry and Trade plans to transform the current site of the Plzeň-Líně airport into a strategic business park, where a so-called gigafactory for the production of batteries for electric vehicles can be built. The ministry’s plan calls for the demolition of the existing airport infrastructure and the removal of old environmental liabilities, but the air rescue station, which the army operates from here to the Pilsen and Karlovy Vary regions, is expected to remain in operation.

The Ministry of Defence reported to the government the official request of the Slovak Republic, on the assistance of Czech fighter jets in protecting their country’s airspace. Slovakia wants to end the use of Russian MiG-29s and switch to F-16s in the near future, but the first U.S. aircraft will not arrive in Slovakia until 2024 and probably will not be used in operations until 2025. The Czech Air Force will protect Slovak airspace from the Čáslav base.

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