Press Conferences

25. 9. 200610:02

Press briefing of the Deputy Prime Minister Petr Nečas and Minister of Finance Vlastimil Tlustý at the chateau Koloděje

Press briefing of the Deputy Prime Minister Petr Nečas and Minister of Finance Vlastimil Tlustý after the meeting of the government at the chateau Koloděje on Monday 25th September 2006

Radim Ochvat, secretary of the Prime Minister:

Nice afternoon, ladies and gentlemen, welcome to the short press briefing. In the course of the meeting of the government, I asked the Deputy Prime Minister Petr Nečas and the Minister of Finance Vlastimil Tlustý for a few words. Mr. Deputy Prime Minister you have the floor.

Vlastimil Tlustý, Minister of Finance: Ladies and gentlemen, on my arrival I said to some of you that the first point, about which the government would decide, would be the decision on the privatization of part of shares of the company of ČEZ, because the further course of the meeting on the state budget deficit for the next year would depend on this decision. The previous government of Jiří Paroubek has left the draft of the state budget, in which 30 billion crowns in the National Property Fund were not covered; and it is the National Property Fund or, to be more precise, the account of the National Property Fund, from which not only removal of so called environmental damage is financed, but also operation of the Fund of Transport Infrastructure and other investment actions. Allow me to quote from the Government's Resolution that was adopted in the morning and the wording is that the government agrees with start of the sale of part of shares of the company of ČEZ, which would result in revenue up to 31 billion crowns. I point out that it is the amount, which is missing in the National Property Fund. The purpose of this sale is coverage of the deficit of the National Property Fund's account. These means will serve for financing of infrastructure construction, like motorways, including co-financing from the European funds, and projects aimed at removal of environmental damage effects. In connection with this Resolution, the government charged the Minister of Transport and the Minister of Finance to check effectiveness of projects funding. In the second part of the debate, the individual budget headings were debated and here allow me to state, before it will be described in detail by the Deputy Prime Minister, that even after publishing of results of the state budget audit, I think it was on 6th September, certain further items of state expenditures were identified as uncovered by the budget, which had been prepared by the government of Jiří Paroubek. And it is very important; it concerns expenditures, which result from valid laws. It concerns amounts of billion crowns and detail information will be given by the person responsible, i.e. the Deputy Prime Minister and Minister of Labour and Social Affairs, as the most of financial means connected with valid laws is missing at his ministry.

Radim Ochvat, secretary of the Prime Minister: Thank you, minister and now the Deputy Prime Minister and the Minister of Labour and Social Affairs has the floor.

Petr Nečas, Deputy Prime Minister and Minister of Labour and Social Affairs: Good afternoon, ladies and gentlemen. We are debating the draft of the state budget in a very detailed manner and it is a fact that the previous government has prepared a real "debt flood" for this country, because they are not only these figures, which we have mentioned several times, i.e. the dramatic expenditure increase, but I would like to mention that based just on laws adopted in spring of this year, the expenditures in the sphere of mandatory expenditures increased by 70 billion crowns in comparison with this year and that the originally drafted expenditure limit, approved by the previous government, was exceeded by 48 billion crowns by the same government. It is just evidence of irresponsible actions of the previous government. Especially dramatic is the development in the sphere that we highlighted several weeks ago, in the time when we were not appointed to our functions, in a very sensitive sphere of social services. It concerns part of public spending that is aimed at the most disadvantaged people; it means handicapped people, seniors and such like. It transpires that the previous government has failed in this sphere. I can mention just a few figures. Budgetary means in the sphere of social services amount to 13,1 billion crowns in this year. The previous government prepared a draft of the state budget and only 9.8 billion crowns were earmarked for this sphere, i.e. lesser amount by more than 3 billion crowns in comparison with the actual state. Moreover, it transpires unambiguously that the previous government had misinformed the Parliament, as it indicated that the new system of social services would not be more expensive than the existing one. It is unambiguously proved that it was not true, that several billions are missing in the system, that the draft of the state budget prepared by the previous government is undersized in comparison with the previous year, and I repeat it again, by 3 billion crowns. Moreover, the increased costs resulting from the new law are not included. It means that the deficit at the amount of 88 billion crowns, proposed by the previous government, is prepared at the expense of the most disadvantaged people, the most sensitive groups of inhabitants from the social point of view, like handicapped people, pensioners and so on. I am of the opinion that it is a very serious issue and we are now trying to find a way how to solve the issue, we are trying to find the way how to finance social services, so that the system could operate starting from the next year and so that operation of facilities, which will provide these social services and which are under the administration of municipalities and regions, would not be negatively affected. Of course, we will also be trying to find a way how to interlink the system of healthcare and the system of social services where combined care of health and social nature is provided. I repeat again, there is a law here, which the government, in spite of the fact that it was using the word "social" in every other sentence, underestimated significantly and did not comprise financial means in its draft of the state budget and it resulted in the fact that more than 3 billion crowns are missing in the system. And in the draft of the state budget, which was prepared by the previous government, the increased expenditures that will occur in the system are not involved.

Radim Ochvat, secretary of the Prime Minister: Thank you, Deputy Prime Minister and now your questions, please. Mr. Takáč, Česká televize.

Daniel Takáč, ČT: Good afternoon, I would like to ask Mr. Tlustý a question. Mr. Paroubek announced several hours ago that the ČSSD would consider support of the state budget provided the "verbal pyrotechnic" is not used any longer. That was the first statement. The second one, he does not agree with the privatization of the company of ČEZ, I mean the state share. They would consider the support of the state budget provided that the project of sale of 49% of the state share in the company of Letiště Praha (Prague Airport) is realized. Is it acceptable for the Czech government? And the second question, which does not concern the state budget, it concerns something else. What do you say to the fact that the Police involved you in 2001 in the file with title "Krakatice"? Are you aware of some wrongdoing? Thank you.

Vlastimil Tlustý, Minister of Finance: I will start with the second question, which I remember better than the first one. Based on several signs, I took into consideration a long time ago that I had been tapped and shadowed. If you remember, I made a speech in the Chamber of Deputies. I asked the then Prime Minister Špidla to answer my clearly formulated question, whether tapping and shadowing of my person was done legally, it means in compliance with the law. Just to document this case I state that the Prime Minister Špidla answered two months later saying that answer of one of the intelligent services was negative and the other two intelligent services that could use tapping technology replied that they would not answer the question. I am of the opinion that after publishing the answer in the Chamber of Deputies, as I had said in public, it was quite evident that the answer to my question if it was presented would have been "yes". That was information on tapping and shadowing of my person. I suppose that the fact is evident.

Daniel Takáč, ČT: Are you aware of some wrongdoing?

Vlastimil Tlustý, Minister of Finance: I am not aware of some wrongdoing; I do not even know in what connection the tapping and shadowing was done. I am not aware of any fact, which would justify it. By the way, I think that it is evident that I have never be aware of it because I asked for explanation in public and it was possible because I was sure that I had not done anything illegal. I deemed the performance of state organs as incorrect. It is subsequently proved with the delay of some five years, and if you remember I mentioned it in media, too. The only thing I achieved was that I was mentioned in media as a man who did not know how to use a phone. Therefore, I expressed my view regarding the case, which is topical now and which was started by the Minister of Interior. I personally deem the evidence as proved in my case and I do not need any other evidence. By the way, some of wiretapping records were provided by certain media, as on the Internet my wiretapping records of those times have been published.

Petr Nečas, Deputy Prime Minister and Minister of Labour and Social Affairs: I would answer the question that concerns privatization. The Minister of Finance will add information if necessary. It is evident that the draft of the state budget was prepared in such a way, as was mentioned here by the Minister of Finance, that the State Fund of Transport Infrastructure cannot be financed by other financial means that those from privatization. As for the requirements of the ČSSD regarding the privatization of the share in the Letiště Praha, this issue has been mentioning for several months. It is remarkable how the ČSSD feels very strongly about this concrete privatization. It is rather a matter for you, journalists, to ask why the ČSSD is fond of it, but we have noticed that they are great fans of this concrete privatization. Perhaps it would be worth of mentioning that it is very interesting to speak about the sale of 49% of shares of the airport in situation when the airport is not a joint stock company and has no shares issued. It means that we do not resist consideration on the privatization, including potential privatization of the airport, but it requires certain preparatory steps. It means transformation into the form of a joint stock company, i.e. careful preparation of the privatization. All these steps must precede any privatization decision, so that all the matters would be done correctly, clearly and transparently. It means that it is possible to speak about the privatization perhaps in 2008. We can hardly do it in the next year, it is absolutely unrealistic. And I repeat again, the requirement for the privatization of the Letiště Praha has occurred as early as in the course of negotiations on so called tolerance of the ČSSD to the minority government of the ODS; it is a remarkable "evergreen" and we have no idea about its reason. As to the idea that was presented here in connection with the privatization of the ČEZ, this privatization is feasible, as the ČEZ is a joint stock company. It concerns finding those 31 billion crowns. The state has a certain share in it and with regard to this fact the privatization can be done quickly. The privatization of the Letiště Praha cannot be done as quickly and it cannot be probably done in such time, which would enable to involve revenues in the state budget for the next year, and which would enable clear transparent and legally correct privatization.

Radim Ochvat, secretary of the Prime Minister: Thank you, further question, please.

Vlastimil Tlustý, Minister of Finance: I would just add information, so that it will be clear that it is a very topical issue, in which the social democracy is interested. There was a question on this issue at the morning meeting of the chairman Topolánek, my person, and chairman of social democracy and former minister of finance. The question was to what degree we are prepared for this privatization. We answered that the privatization is not prepared by our predecessors from the process point of view; it concerns what the Deputy Prime Minister had said. It is rather premature to speak about sale of shares of a company, which is not a joint stock company. And second, I have told it to some of you, I am of the opinion that in case of the national airport it is not correct to carry out real privatization, but it is better to consider long-term rental and in this case the state property would be administered by a private firm.

Radim Ochvat, secretary of the Prime Minister: Thank you, further question, please. Mr. Houska, televize Nova.

Kamil Houska, televize Nova: I have a question, if you do not mind; you say that you are going to sell shares of the ČEZ, that you want 31 billion crowns. How many percent of shares does it represent? And one more question. You were talking yesterday and the day before yesterday about the deficit. You mentioned those 88 billion crowns plus those 31 billion crowns for the National Property Fund. If we take into consideration this money, does it mean that you are drawing near to the deficit of 88 billion crowns or that you are constantly finding new missing financial means, and that the deficit will be higher as you had indicated?

Vlastimil Tlustý, Minister of Finance: Well, it is absolutely evident that the figure of 88 billion crowns has never existed. The government of Jiří Paroubek always added to this figure those 31 billion crowns of privatization revenue, and you will certainly be asked questions by journalists of various international companies regarding this figure. Also a lot of further steps were added to this figure and it was always a fictive figure. And the share of the debt in the state budget in the next year in the GDP is at the moment 4% - and whether those 31 billion crowns will be covered by privatization revenues or whether they will be included in the net deficit is from the methodological point of view the same. In other words, the figure of 88 billion crowns was really just a propagandistic figure and had no real base. Those 31 billion crowns must be added to this figure at least and we have always done it. But, and it was content of statement of the Deputy Prime Minister, now they are constantly discovering amounts, which are consequences of the Act on Social Care, ant these amounts require parallel transfers of financial means to the individual beneficiaries and transfers of money from the state to social care facilities administered by regions and municipalities. The amount of 8 billion crowns was mentioned at the tripartite meeting yesterday. We originally supposed the amount of 2,5 billion crowns in the state budget, we presupposed it, not the government of Jiří Paroubek; it presupposed zero. Today, based on today's debate it is evident that the Ministry of Labour and Social Affairs will require the amount of 5 billion crowns. Why? I will repeat it – the amount, which was not taken into account by former Prime Minister Jiří Paroubek. Another similar amount is amount resulting from the Labour Code. The Minister of Industry and Trade informed a minute ago that an amount of 1 billion crowns for the reduction of mining activities is not covered. I just mention examples, the meeting is not still finished, but further items occur that the government must cover as they result from existing law.

Kamil Houska, televize Nova: To what figure are you drawing near, then?

Petr Nečas, Deputy Prime Minister and Minister of Labour and Social Affairs: I would just to add information that the figure of 88 is absolutely chimerical figure, absurd figure, because this figure did not involve even mandatory expenditures that result from existing laws and it did not involve 31 billion crowns for the State Fund of Transport Infrastructure. This figure was even in contradiction with the Act on Budgetary Rules, because further figure that we must add to this state budget draft, this figure was based on approval of three acts that are now being debated in the Chamber of Deputies and nobody knows whether they will be adopted or not and what will be their wording. In other words, there are further 25 billion crowns there at least, about which nobody can say anything. It means that those 88 billion crowns are absolutely incorrect. Notice my diplomatic manner, I have avoided of the word "scurrilous figure", as it does not comply with the wording of the Act on Budgetary Rules.

Radim Ochvat, secretary of the Prime Minister: Thank you. With regard to the fact that both gentlemen must go to the meeting of the government, I would ask you for the last question at the moment. Mr. Dolejší, Mladá Fronta.

Václav Dolejší MfDnes: Well, I would ask what is the public finances deficit now, what is its relation to the GDP in percents and whether the amount of 10 billion crowns for the construction of the motorway to Ostrava was included in the budget again and whether the government proposed some reduction regarding number of state servants? Thank you.

Vlastimil Tlustý, Minister of Finance: Regarding the motorway D47. There occurred a delay during last years; it represents some 5 billion crowns and it is impossible to eliminate it. With regard to the fact that the construction is not prepared; it is not possible to spend further 2 billion crowns in this year, according to the statement of the relevant institution. The rest financial means, if I remember well 12,6 billion crowns for continuation of the action are involved in the state budget. It means – delay from the past cannot be eliminated, the delay of 2 billion crowns in this year cannot be eliminated either and those 12,6 billion crowns are included in the state budget. You asked me another question.

Václav Dolejší MfDnes: Have you prepared any reduction regarding number of state servants?

Vlastimil Tlustý, Minister of Finance: At the moment, the government is trying to find financial means for expenditures resulting from existing laws, as the Minister of Labour and Social Affairs mentioned here. I can just state now that there will be debate on proposals for reduction of expenditures at all ministries and state administration organs to the level of this year. This is one measure intended. The second one, which is very likely, is that the government will decide to freeze drawing financial means from reserve funds that the individual ministries have at their disposal, so that these means would be prepared for expenditure coverage in the next year. And one of things that are very close to final decision is cessation of construction of new administrative buildings, which were involved in certain state budget headings and for which there are not financial means enough.

Václav Dolejší MfDnes: I asked a question regarding the deficit, in fact.

Vlastimil Tlustý, Minister of Finance: I suppose that you will wait to see the final figure, I hope. You know well that the figure started at the amount of 119 billion crowns and until all budget headings and those amounts we mentioned here are debated, it would be just divination and I do not want to do it. Wait to the evening, please.

Petr Nečas, Deputy Prime Minister and Minister of Labour and Social Affairs: Skeletons at the feast are being added up.

Radim Ochvat, secretary of the Prime Minister: Thank you. Well the very last question, please.

Daniel Takáč, ČT: A question concerning security situation in the CR. Mr. Paroubek also said today that you decided on removal of Mr. Randák in the time, when you had already known about the threat of the terrorist danger in the CR, as the information is elder. And you removed Mr. Randák at that time, this is one thing. The second thing, can you respond to the objection that you convened the State Security Council regarding this situation as late as today? Why did not you convened the State security Council sooner and why only the government decided on measures concerning security risks, it means people who do not know anything about it?

Petr Nečas, Deputy Prime Minister and Minister of Labour and Social Affairs: To start with, I would recommend Mr. Paroubek to read laws and the Constitution. The only one competent organ, which could decide, was the government of the CR. The State Security Council is an advisory body, which prepares certain decision in the sphere of foreign-security and defence policy. It is not an organ which could decide, in no case. It is really necessary to read what organ is the top organ of executive power in this country; it is the government and therefore Mr. Paroubek is absolutely mistaken in this case. The government was informed of the development, which became more dramatic in Friday, based on new information of our intelligence services. They were directors of intelligence services who asked for convening of the meeting of the government. And the government had since the very beginning the same information as the Chairman of the Security Committee, Mr. Bublan. And as you know, Mr. Bublan stated, before he was evidently reproached by the chairmen of his party, that their government would have been acting in the same way. Then, Mr. Bubla, who was under pressure, gave in to Mr. Paroubek and started to contest the decision, but media recorded the sentence saying that their government would has been acting in the same way, I hope. Therefore, I am of the opinion that it is evident that Mr. Paroubek´s behaviour is absolutely incredible. I must say I am very disappointed by his behaviour, in spite of the fact that I had not expected anything positive, that he tries to misuse such situation for attacks, for political aggression and for kicks to the government. It is incredible, in my view and I cannot add any comments to it.

Vlastimil Tlustý, Minister of Finance: I would add information to that; I was one of participants of the night session and the Chairman of the Security Committee Bublan was present, as well and he is therefore the best witness. There was expressly stated there, I remember it precisely – that the meeting of the government was convened immediately after directors of intelligence services asked for it. I do not know what the information resources of Mr. Paroubek are. I just know that directors of intelligence services used this clear sentence – we asked for convening of the meeting of the government today, which is to be aimed at debating the security situation, so that relevant measures could be taken and so that general public might be informed. Immediately after that the meeting of the government was convened and no delay occurred. To be more precise, I do not know whether directors of intelligence services had different information or whether they gradually analysed information and asked for convening of the meeting after that; it is expressly their problem. But at the moment they asked for it, the government acted immediately.

Radim Ochvat, secretary of the Prime Minister: I thank you for the present. We will inform you on the start of the next press conference, of course.