Browsing by Author "Řehořová, Daniela"

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    Hospodářská politika České republiky v porovnání se zeměmi EU
    (Technická Univerzita v Liberci, 2008-01-01) Řehořová, Daniela; Švermová, Pavla
    The Czech Republic has a small and open economy that due to its geographical position has been influenced by the economics of other European countries. It has been empowered by joining the European Union structures and adopting the EU´s rules. That means that its economic prosperity depends not only on regulating its own economic policy but also a necessity to converge the economy to the of other EU´s countries. The Czech economy is currently in a solid but long term unsustainable growth phase. As a consequence of demographic changes, the growing needs of the public health services and educational system has led to a growth in state debt. Once the Czech economy absorbs or depletes the financial benefits of the current boom, there is a danger that this debt can stifle the economy leading to a recession. A recession could then prevent the fulfilment of the convergence criteria for adopting the Euro and make any subsequent reforms all the more painful. The experience of both "liberal" Ireland and "social-democratic" Sweden in recession followed by their gradual climb back to economic prosperity does show us that there is in principle only one right course for economic policy to take in such circumstances regardless of the ideological view of the government. The economic policy of the Czech Republic for the next 3-5 years should take a path of huge fiscal restriction with special focus on state budget expenditure. Such reforms should lead to sustainable fiscal consolidation and enable later economical stimulation with tax modifications. In contrary, monetary policy could stay neutral and should focus mainly on targeting the inflation. When the decision making process is blocked due to political stalemate in the Parliament, reforming effort often loses momentum and eventually stops. Here we can think about alternative methods of economic policy making. One of the possibilities is creation of an authority independent on election cycle and responsible for formation of fiscal policy according to specific targets, as well as is central bank in monetary matters.
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