Minister Kalousek responded to your chat questions

Car scrapping scheme, inflation concerns, G20 or accounting standards. These are some of the issues addressed by the Czech Finance Minister in the European chat.

  • Pavel Kučera

Good morning. Do you agree with the introduction of the car scrapping scheme in the Czech Republic? If you do or don't, why? Do you interpret the Slovak car subsidy as a success for the Slovak economy? Thank you.

I do not agree with the introduction of the car scrapping scheme – it is an unfair, temporary aid for a single industry (why not computer or shoe subsidies, for instance?). Secondly, it has dramatically asocial consequences. It forces the poorest who cannot afford a car to make a contribution via the scrapping bonus to the somewhat richer who are thus motivated to spend all their savings and take a loan in the middle of a crisis to buy a new car. If their situation deteriorates, they will lose the new car while having scrapped the old one. The only thing left will be the debt. The automotive lobby will not care – they will have sold their car by then. This is even less moral than consumer credit offers because they are not subsidized by the taxpayer.

  •  Peter

Dear Mr. Kalousek, should we be afraid of inflation of the Euro and of other European currencies caused by the various state-funded incentive programmes and stimuli?

This risk is here. The history of economic crises does not know situations in which after the end of the crisis substantial inflation did not come. Therefore it is necessary already now to think thoroughly and carefully about exit strategies to lead us out of the present policy of fiscal impulses. A consolidation of public budgets which is as rapid as possible is a necessity. In the contrary case there is a threat of the instability of the currency.

  • W.Huber

Mr. Minister, if I understand it correctly, at the G20 Summit in London the U.S. failed to convince the Europeans to dig themselves even deeper into debt. Do you consider this to be a victory or a defeat for the EU? Should the EU not spend more money on various revitalization efforts, like the USA?

I consider the conclusions of the G20 a result of common sense. Delegations did not put pressure on others to provide more fiscal impulses. We are all aware that it will be necessary to pay the debt and everything has its limits. The G20 summit was successful mainly because it was a common agreement on common principles. It was not a competition in digging individual countries into debt.

  • Šimon Stiburek

Good morning, Minister. I have read in the media that the ECOFIN Council considers the loosening of US accounting standards a "serious problem" and pushes for their transatlantic harmonisation. What are the actual political chances of such harmonisation? Does the EU have any chance to push the FASB (Federal Accounting Standards Board) where it wants to, or is the FASB (or the US administration) actually willing to seek compromise and discuss these issues with Europe? Is it possible to create a body analogous to the ESRC (European Systemic Risk Council) that would act on both sides of the Atlantic in the near future? And one more thing – considering the global ties among markets, it would surely be desirable to push for a plurilateral or multilateral harmonisation of accounting standards – have any projects of this kind been launched? Does the EU intend to push for something similar in the future? Are there any arguments against? (Save for the restricted sovereignty of the signatories, of course.) Thank you for your response and I wish you good luck in these hectic days.

This is a true problem. Different accounting standards might lead to two parallel systems of assessing state aid and, in effect, to unfair competition. Therefore, as a representative of the country holding the EU Presidency, I have asked the Commission to address this issue, and the Ecofin Ministers have turned to the international authority for setting international accounting standards. I believe we have to be very quick in finding a way towards the same rhetoric.

Further questions answered by the Minister can be found in the relevant language versions of the chat - czech and english.

Last update: 16.8.2011 15:33

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