In a bid to tighten a wide budget gap and put the country back on the euro-adoption track, the Czech government on Monday approved a budget deficit target of 78.4 billion koruny (about 3.6 billion dollars) for 2008, Finance Minister Miroslav Kalousek told reporters, according to dpa. Meeting the target would require cabinet ministers to draft and push through a leaner budget for the next year. In order to do so, the center-right ruling coalition would have to steer its package of public finance reforms through the parliament in August. The cabinet hopes all coalition members of parliament will vote for the proposed reform bills despite their reservations, as a failure threatens to sink the weak government. The European Commission recently reprimanded the Czech Republic for its sprawling budget gap, which has strayed the country from a course to adopting the European common currency. In its plan for adopting the euro, the government promised to keep its deficit under 3.3 per cent of gross domestic product (GDP) in 2007. But this year the gap will reach 122 billion koruny or around 4 per cent, Kalousek said. In order to enter the eurozone, the Czech cabinet needs to rein in its deficits under 3 per cent of GDP, a requirement set by the so-called Maastricht criteria for the euro adoption.
