Czech unions stage protest against government reform plans.

By bne IntelliNews May 23, 2011
Some 40,000 Czechs protested the governments plans to reform the pension and healthcare system in a rally organised in Prague by the countrys major umbrella trade union CMKOS, Radio Prague reported. The reforms envisage raising the retirement age, introducing a second pillar of the pension system by transferring part of the pensions to private funds, raising payments for healthcare and tightening social benefits. The plans include also an increase in value added tax (VAT) to finance the planned reforms. The reduced VAT rate, which is applied on foods, drugs and books, will be increased from the current 10% to 14% in 2012 and unified with the regular VAT rate at 17.5% as of 2013. The regular VAT rate now is 20%. The government says the reforms are a priority on its agenda as it seeks to cut the countrys debt and reduce the budget deficit to 4.2% of the gross domestic product this year from 4.7% in 2010 and achieve a balanced budget by 2016. Unions threatened to stage strikes if their demands were not met. Protesters called for resignation of the government and early elections. The next scheduled election is due in 2014 but early elections are likely if the three-party coalition breaks amid internal wrangling and corruption allegations.

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