The Process of Budgeting and Issues of Indebtedness in the Czech Republic

Abstract

In the Czech Republic, the Ministry of Finance prepares the initial draft of the annual Budget Bill for the government. Afterwards, the government adopts the draft and submits it to the Chamber of Deputies. The draft budget is accompanied by a Medium-Term Expenditure Framework, which projects the aggregate income and expenditure for the two subsequent years. In accordance with the Czech Constitution, only the Chamber of Deputies is involved in the approval of the budget proposal; the Senate is not involved in this process. There is no constitutional provision or law prohibiting a budget deficit, but constitutional amendments act that would limit government debt is currently under consideration that would limit the government debt. Some kinds of expenditures are outside of the parliamentary budgeting process. The budgets of municipalities (communes) and regions are separate from the state budget. While retirement pensions and social insurance payments are included in the state budget, the expenditures for public healthcare services are outside of its scope.