Concerned about the state budget, the new center-right government in the Czech Republic is saving money on salaries for civil servants despite the recent rise in inflation to 6 percent.

The salaries of teachers, soldiers and in the health and social services are increasing less than decided by the previous government in November, those of civil servants are even frozen at the current level.

This was announced by the new Prime Minister Petr Fiala (Democratic Citizens Party, ODS).

Incidentally, this also applies to members of the government; a law on this will soon be presented.

Andreas Mihm

Business correspondent for Austria, East-Central and Southeastern Europe and Turkey based in Vienna.

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Accordingly, salaries of police officers, firefighters and professional soldiers will rise in the new year by 700 kroner instead of 1000 kroner per month, the salaries in the health service by 6 percent, those of teachers by 2 percent instead of 3 percent.

The interest groups of those affected protested sharply.

Union representatives in the government ridicule tens of thousands of employees whose incomes are not adjusted to the rising inflation rate.

They complained that they were not involved in the decision.

As soon as the government was in office, it was already disappointing, explained the teachers' union with a view to real income cuts due to inflation.

The Association of High School Directors showed a certain understanding, but insisted on Fiala's promise that teachers' income would not fall below 130 percent of the average income.

Disastrous budget situation

Finance Minister Zbyněk Stanjura (ODS) justified the decision with the state budget, which was in a disastrous state. The recently appointed government has pledged to reduce the central government deficit to below 300 billion kroner (€ 12 billion) in 2022, after the elected government had targeted € 380 billion (€ 15.2 billion). With a national debt of 42 percent of the gross domestic product (GDP), the debt is measured by European and international standards, but Germany's currently around 72 percent and Austria's 82 percent.

However, the Czech national debt before the pandemic was only 35 percent.

The Treasury Department had forecast a public sector deficit of 4.4 percent of GDP for 2022 in November.

Former finance minister Alena Schiller said that reducing the budget deficit by around 80 billion crowns would not be possible without drastic cuts that would affect people and planned investments.

Help for energy costs

The new finance minister Stanjura also pointed out that the salaries in the public sector were above average.

In recent years the gap between salaries in the public and private sectors has grown.

The remuneration on public Tuesday currently exceeds that of the private sector by 15 percent.

"This is wrong and the taxpayers don't understand," he said.

As much as the new government wants to cut spending, because of the energy price crisis it also decided to expand aid.

Accordingly, the housing benefit will almost double, and the group of beneficiaries will grow by up to 40,000.

Households that cannot pay their energy bills can count on one-off state aid, and there is also an aid commitment for companies in distress.