According to the SAO, the Czech Republic is not prepared for crises and has not come close to a balanced budget

Commercial presentation Update: 04/02/2024 18:05
Issued by: 2/04/2024, 07:13

Prague – The Czech Republic is not sufficiently prepared for crises and the responsible institutions have not learned from past extraordinary events, such as the covid-19 epidemic. The Supreme Audit Office (SAO) stated this in its annual report for last year. He also drew attention to the fact that last year, even with the contribution of an extraordinary tax on unexpected income, the state was unable to ensure that the budget came close to a balanced economy. Prime Minister Petr Fiala (ODS) stated that the government is trying to correct shortcomings and neglect from the past. The Ministries of the Interior and Defense rejected some of the controllers’ reservations.

The SAO considers it likely that the state will repeat similar mistakes at critical moments, which can lead to significant damage, waste of money and endanger the health of the population. So far, the authorities have mostly taken only formal steps, while real changes, which would improve crisis preparedness in practice, come only minimally, according to the controllers.

The office stated that, for example, the system for the protection of soft targets is still not complete, and the long-term neglected state of the protection of the population is also a weak point.

However, the Ministry of the Interior claims that the population protection system in the Czech Republic is among the most robust and best prepared in the EU. “The National Audit Office evaluates the entire system only on selected measures that can be used in a state of threat to the state and a state of war. However, these measures are not universal for all types of situations,” the interior said.

The SAO also wrote that, according to him, the Ministry of Defense was not able to effectively use the money provided, despite the fact that its expenses are repeatedly increasing. The office also sees a risk of waste in the fact that the ministry has recently concluded contracts for the supply of weapons directly with governments or manufacturers without competition.

The defense objected to this accusation. The awarding of contracts in the field of security and defense without tendering is permitted by law, and other allies in the European Union and NATO follow suit, the Ministry of Defense said. According to the Ministry’s statistics, last year about 70 percent of contracts were awarded without using this legal exception. “The Ministry consistently makes sure that – if possible – the tender process is advertised,” the office said.

Prime Minister Fial was not surprised by the rebuke from the Supreme Audit Office that the Czech Republic is not sufficiently prepared for crises and emergency situations. Not enough attention has been paid to this in recent years, the government is trying to fix it, he told journalists today during a visit to Lithuania. The goal is for the state to be prepared for crisis situations of various types, he added.

The SAO also pointed out in its annual report that last year, as in previous years, mandatory budget expenditures continued to grow, and even the increase in state budget revenues did not help sufficiently reduce the pace of state indebtedness.

The Ministry of Finance respects the conclusions of the annual report of the SAO, according to it, the consolidation of public finances is necessary. According to Deputy Prime Minister Marian Jurečka (KDU-ČSL), the expenses also include state aid in times of high inflation, but it is necessary to make the state apparatus more efficient.

The national debt increased by 216 billion year-on-year last year and amounted to 3.111 trillion crowns at the end of the year. Expenditures for its operation increased by almost 29 billion from 2019 to last year’s 68.3 billion crowns. “The increase in debt increases the burden on future generations,” warned the SAO.

The government is trying to slow down the growth of debt. Last year in the Parliament, it pushed through a consolidation package that is supposed to save a total of about 150 billion crowns this year and next year. For example, it increases taxes for companies, cancels some tax exemptions for individuals.

According to the Ministry of Finance, the state budget for last year was prepared as a deficit due to a significant increase in expenditures in social benefits or investments and extraordinary expenditures to compensate for high energy prices, which were not fully covered by extraordinary revenues. “Ultimately, last year the state budget managed a deficit of CZK 288.5 billion, i.e. CZK 6.5 billion better than the original plan and CZK 71.9 billion better than in 2022,” Stefan Fous from the Department of Communications told ČTK today ministries.

According to Jurečka, the question is to what extent the SAO “places the report in the development of the last two years”. The minister pointed to high inflation and the subsequent extraordinary valorization of pensions or the payment of housing allowances and other benefits due to expensive energy and food. “What the SAO says must be taken very seriously. We spend a whole range of expenses on debt, on the debt of future generations. It is appropriate that across the state and state administration we try to make the state apparatus and activities that the state ensures more efficient. It is also revision of agendas,” Jurečka added.

CR safety, economy, army, administration 2023 SÚ NÚ FLEŠ