Saving, saving. Then they borrow 137 billion. The government has struck again

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The debt, which is said to be around 137.4 billion crowns, is mentioned in the updated national recovery plan, which the government approved this week, and which the Czech Republic intends to apply through the Recovery and Resilience Instrument. According to the government, the Czech Republic is set to receive another 33.4 billion crowns in subsidies. Even the government In the states“Investments from the National Recovery Plan will roughly double from 2021 compared to the original plan”.

According to the cabinet, the funds the Czech Republic receives through borrowing or grants will be used for “projects that will jump-start the Czech economy, ensure clean and cheap energy, provide better access to housing or modern education.”

“The Czech Republic has decided to use a favorable loan, with which we can get up to 137.4 billion crowns. This loan will allow us to invest in areas that are necessary to transform society and the economy. In this case, we are talking about the power of housing or education. Those are the investments we need to make anyway. And , we are creating the conditions for the development of the microelectronics sector with the aim of supporting the production of chips. Thanks to this loan with a low interest rate, however, we will receive funds for them under better conditions than the Czech Republic would have borrowed on its own, and a ten-year deferral of principal repayment. pronounced Minister for European Affairs Martin Dvorak (STAN).

These projects include housing reform, building renovation and development related to renewable energy, strengthening cyber security, financing digitization projects, but also improving care for the elderly, modernizing social care or improving educational workplaces. and modernization of education.

  • STAN
  • Minister for European Affairs

The loan will have a maturity of 30 years, and the Czech Republic will only pay interest for the first ten years before starting repayment of the loan principal, i.e. five percent of the loan amount each year for the remaining 20 years. The exact rate of interest will be based on the prevailing conditions of the loan. According to the government, this should be a very favorable interest rate, for example, it was 2.6 percent in the second half of 2022.

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However, many people have considerable doubts about the “goodness” of this loan. For example, former finance minister Miroslav Kalousek indicated that he was interested in “how thoroughly” the government considers the exchange rate risk of this debt. “This ‘cheap credit’ can be very expensive…” he noted.

The former governor of the Czech National Bank (ČNB), Miroslav Singer, commented on this to Kaloska, and assured him that it would calm him down to know that “it is even with the names of the specific ministers who spoke in the debate”. “. “So Joseph Sikela, for example, can calm me down… he was on the Erste board, he knows more about exchange rate risks than I do…” Kalousek pointed out that he would like to ask the minister. The government has adequately taken into account exchange rate risk in the industry and Trade.

Journalist Marek Stoinis has made no secret of his disappointment over the loan from the European Commission. He pointed out that it will “go above all to a green and digital transformation, the aim of which is to quickly wean the Czech Republic’s one-time coal powerhouse from coal” and switch to “renewable sources” of energy (mainly wind and solar), as the EU’s ambitious climate commitments dictate.” .

“And you know what Germany is doing after it shuts down all its nuclear power plants? To replace them, coal-fired power plants are burning record amounts of brown and black coal imported from South America, especially Colombia. Going, I know?…),” he points out how “green” projects have changed in Germany. “The destruction of European civilization and prosperity is full of twists and turns,” he added.

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Olympian and doctor Lukáš Pollert was surprised by the fact that the Czech Republic could go into debt due to energy reform at a time when it is already struggling with a record increase in national debt. “If you don’t have it, borrow 137 billion to fight wind farms,” ​​the government plan said.

Similar responses were heard from several Twitter commenters. “Every member of the government who raised a hand for him must be responsible for this debt!” said one user.

Internet commentator Pavel Haraším noted that “credit to the government of Petr Fiala is very good”.

“If he can’t, if we have a registration deficit, we will borrow,” said another debater, comparing the government’s plan to the slogan of Czech sports giants.

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“Everywhere you look, there is no better path to freedom and self-sufficiency than having your hands tied by debt,” added another Twitter commenter, asking if the plan had been approved by the same government. Literacy?” “Everyone from the government should hand back their university degrees and start digging,” he says.

There was also a comparison with the current government plan to reduce debt by reducing subsidies. According to some voices, this plan of the government is very negative regarding the declared debt. “We want to cut subsidies, so we’ll borrow 137 billion for them,” Debate said on Twitter.



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