- Title: Czechs need to close wage gap, should join euro - prime minister
- Date: 25th May 2017
- Summary: PRAGUE, CZECH REPUBLIC (MAY 25, 2017) (REUTERS) CZECH GOVERNMENT HEADQUARTERS IN PRAGUE SIGN READING "CZECH REPUBLIC GOVERNMENT" (SOUNDBITE) (Czech) CZECH PRIME MINISTER, BOHUSLAV SOBOTKA, SAYING: "The main (election) topic is the level of people's income, increase in wages and salaries. I am convinced that we have higher productivity and the salaries don't match it when I compare them with the salaries in Western Europe. I think the salary level is too low. What can the government do? We have to get out of the level of an economy based on low wages to an economy based on production and services with high value-added." SOBOTKA'S HANDS (SOUNDBITE) (Czech) CZECH PRIME MINISTER, BOHUSLAV SOBOTKA, SAYING: "We should be ambitious and deal with the technological revolution, digitalization, and catch up with the delay we have - in managing technological changes - as well as moving up to an economy based on higher wages than those we see today in order to stay on the path of European integration." RECORDER (SOUNDBITE) (Czech) CZECH PRIME MINISTER, BOHUSLAV SOBOTKA, SAYING: "The government plans to submit a budget draft with a deficit of 50 billion crowns and we should keep this deficit as it is acceptable for the Czech Republic." RECORDER (SOUNDBITE) (Czech) CZECH PRIME MINISTER, BOHUSLAV SOBOTKA, SAYING: "I didn't decide for Finance Minister Andrej Babis to resign in order to benefit the Social Democratic Party ahead of the election. For me it's important that the Social Democratic Party keeps its values and character." HANDS (SOUNDBITE) (Czech) CZECH PRIME MINISTER, BOHUSLAV SOBOTKA, SAYING: "I think Brexit will have a negative effect on Europe, and in the end it will also have a negative effect on Britain and it is not clear it will be a successful story. But our duty is to reduce the possible negative influence of Britons leaving (the EU). I believe the V4 (Visegrad 4) should take over some issues that have been managed for a long time by Great Britain in the frame of the EU, like, for instance, the right functioning of our internal market." RECORDER EXTERIOR OF CZECH GOVERNMENT HEADQUARTERS
- Embargoed: 8th June 2017 15:54
- Keywords: join euro Czech Prime Minister Bohuslav Sobotka wage gap
- Location: PRAGUE, CZECH REPUBLIC
- City: PRAGUE, CZECH REPUBLIC
- Country: Czech Republic
- Topics: Government/Politics
- Reuters ID: LVA0016IC6HX5
- Aspect Ratio: 16:9
- Story Text: The Czech Republic must narrow a wage gap with west European states and should strive to join the euro, Prime Minister Bohuslav Sobotka said on Thursday (May 25), adding that the path to higher living standards would be the main issue in elections this year.
Sobotka has presided over a period of strong economic growth, low borrowing costs and rising wages, but his Social Democrat party faces a tough task to beat the rival ANO movement of former finance minister Andrej Babis in the parliamentary election, due in October.
"The main (election) topic is the level of people's income, increase in wages," Sobotka told the Reuters Central & East European Investment Summit.
"We have to get out of the level of an economy based on low wages to an economy based on production and services with high value-added (elements)," with more investment channelled into research and development.
Czech unemployment is the lowest in the EU, at 3.2 percent in March, according to Eurostat, but the average monthly wage in the fourth quarter of 2016 was still less than a third of Germany's 3,984 euros, although buying power differences are smaller.
Sobotka said he would seek to boost wages in social services and universities in the 2018 budget, while this year's central government budget deficit would end up meeting or beating the planned 60 billion crowns.
The strong fiscal position, low rates and low inflation mean the country could qualify for the euro but there is no plan in place to join.
The main parties are divided over membership, which 72 percent of Czechs oppose, according to a poll this week.
Sobotka said the next government should lead talks with unions and employers over conditions for euro adoption and also set an entry date, although that would be beyond the next parliamentary term ending in 2021.
The election will pit Sobotka against billionaire businessman Babis, who the prime minister forced out of government this month due to questions over his past tax dealings but who remains the country's most popular politician.
Critics see Babis as a threat to democracy, citing his tight grip on his anti-establishment ANO party, his view that the state should be run like a company, and alleged conflicts between his business and media interests.
Sobotka said Babis' "authoritarian tendencies" could take the country in the direction of Poland and Hungary, which EU partners have criticised for backsliding on democracy.
Babis says attacks against him are politically motivated and aimed to halt his drive against corruption in mainstream political parties.
The Czech proportional representation system means the election is likely to throw up a variety of options for the next government's make-up.
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