Economy

The Czech Republic celebrated a major anniversary on May 1 this year. Exactly twenty years ago on this day, the Czech Republic joined the European Union, and thus became part of the Single European Market. Apart from the political implications, joining the EU had major economic consequences. These are the ones we are going to look at now.

Few things stir the public sphere as much as the controversial subject of the adoption of the euro in the Czech Republic. Although one side of the debate always vehemently puts forward arguments in favor of adopting the single currency, while the other side points out the unmissable pitfalls of the euro, one crucial economic argument seems to be continually neglected.

The tax burden directly determines how many resources remain in the hands of businesses and how much goes to the state budget. However, it also has some influence on the price level. The size of the tax burden affects the speed of economic development - the more money a business has in possession, the more development and expansion opportunities it has, the more materials it buys, the more money it invests in the purchase of new equipment.

Can financial markets put pressure on a powerful country like France, the world\'s eighth-largest economy? It is better not to test it. The UK has found that out several times. An analysis by Institut Montaigne found that promises made before the election by the leftist New Popular Front would increase France\'s annual budget spending by €95 billion and the state finance deficit by 3.6 percent of GDP.

Many governments are interfering more and more deeply in economic processes. Protectionism is on the rise in the world. The result could be a stagnant global economy. Tadeusz Syryjczyk, Minister of Industry in Tadeusz Mazowiecki\'s government in Poland, once stated that the best industrial policy is no industrial policy.

With its Commission Work Programme 2024, adopted on October 17, 2023, the European Commission emphasized its commitment to reduce reporting requirements by 25 per cent. While the Commission promises to cut bureaucracy, the Corporate Sustainability Reporting Directive (CSRD) is looming. The CSRD imposes substantial new disclosure and compliance requirements on companies.

In June 2024, the European Commission assessed that it was justified to open the excessive deficit procedure, among others, for Poland. In the EC\'s assessment, the published report justifies the initiation of the excessive deficit procedure for seven countries: Belgium, France, Italy, Hungary, Malta, Poland, and Slovakia.

In recent days, the media in Poland have been dominated by information about the dispute over the election subsidy for Law and Justice (PiS), as well as the intense actions of the new government aimed at addressing the abuses of the United Right authorities. The awaited decisions by the National Electoral Commission and the arrest of former Deputy Minister of Justice Marcin Romanowski are the main topics captivating public opinion.

The current process of negotiating salary increases for public servants should also be seen in the context of international comparisons. Slovakia spends the most on salaries in the whole V4, not only as a share of total public administration expenditure but also as a share of GDP. In these comparisons, Slovakia spends more than the EU average.

In its program statement, the government announced its intention to increase the progressivity of personal taxation. In the budget plan, it already speaks specifically of the intention to \"introduce 3rd and 4th personal income tax rates from 2025,\" which is expected to increase public revenues by EUR 78 million. A 3rd rate of 30% is to apply to annual personal income above EUR 80 000.