The legislative side to the Czech government’s brush with death yesterday was the pushing through of a higher VAT rate in an attempt to increase revenues. The move is controversial, as there is no consensus on the best way forward, with some analysts and political groups favoring pro-growth, stimulus-minded policies as the best way to increase tax revenues.
Just as remarkably, the coalition government managed to push through its vision of pension reform, which will allow citizens to put money into private funds, instead of trusting the state to look after their retirement savings. The reform goes the opposite route as has been taken in Hungary, where the government unleashed a storm of criticism when it decided to push its citizens back into state-led pension programs. Many saw the measure as crude method to bring more revenues into the state budget.
