RPT-Czech parlt adjourns debate on 2008 budget draft

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The lower house of Czech parliament adjourned on Wednesday a debate on a 2008 budget draft that aims to bring the country's public finance deficit into line with European Union fiscal rules.

Deputy Speaker Vojtech Filip said lawmakers would decide on Tuesday on the schedule for approving the government's fiscal plan in the first out of three required readings.

The bill sets a 70.8 billion crown ($3.64 billion) central government deficit target for next year on spending of 1,107.3 billion crowns.

The reduction of the gap in the narrowly-defined central budget from this year's projected 81 billion shortfall would help slash the overall public sector deficit to 2.95 percent of gross domestic product (GDP) next year.

The overall fiscal balance, including the central budget and municipal finances and healthcare insurers, is forecast to end in a shortfall of 3.6 percent of GDP this year, above the EU's 3 percent threshold.

Next year's improvement is based on reform steps included in a fiscal reform package, which cuts welfare spending, hikes the sales tax, and cuts welfare, corporate taxes and personal income taxes, and which won final parliamentary approval last month.

[PRAGUE/Reuters/Finance.cz]