Mirek T. learns how to govern

There is little potential for reform in the Czech Republic, PM Mirek Topolánek plaintively asserted some time ago in explaining why he had taken to describing the public-finance reform as a preliminary „reform step zero.“ But when the PM was defending this key government project in the lower house last week, he said Czechs ― reportedly some 80% of them ― are insisting on reform, because they are fed up with the way public finance is wasted. „This is capital we can't throw away,“ Topolánek said. So what is this all about: Is there really enthusiasm for reform, or does nobody really want it? If the PM in charge of the reform doesn't know, how is anyone else supposed to know?

The magic fat wallet

It's not the only messy conflict accompanying the cabinet's effort to re-set public finances. There has also been speculation about the reason for the reform. The PM told Parliament the goal is sustainable public finance ― „Mandatory spending would exceed state budget income in only two years. A mere two years of inertia …“ ― but many ODS members who tried hard to negotiate changes to the upper tax rate think the main reason for the reform is to enforce the ODS election programme, which focused on introducing the flat tax. The party hopes that, in accordance with the liberal economic doctrine of the Laffer curve, the flat tax will bring even higher economic growth, and give ODS a good start on the next election…