Final Word from Friday, May 23, 2003

Premier Vladimír Špidla has linked his political future to public-finance reform. He says that it's his strategic priority and that he's willing to do whatever it takes to see it through. For most Czechs so far, his reforms mean primarily higher taxes. First the coalition voted to raise alcohol and tobacco prices, and then yesterday it pushed through VAT changes that will increase prices for many goods and services by 16.2%. The changes were approved just an hour before unions took to the streets to protest against the budget reforms and three weeks before the EU referendum. The timing of yesterday's VAT hike couldn't have been better for ODS and the Communists, who of course voted against the bill. Labor unrest and a weak result in the EU referendum could send Špidla into an uncontrollable downspin. If he's got a strategy up his sleeve, now's the time to show it.


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