The Czech government lost a confidence vote in the lower house of the Czech parliament. Now the Czech President Klaus should start consultations to nominate a new government. This may be quite difficult, since the lower house is split between rivaling parties.
EurActiv reminds us that this is not a precedent – the government of a country presiding the Council has fallen twice before – in 1993 in Denmark and in 1996 in Italy. From a legal point of view there is nothing to worry about. However, today the European Union needs really strong leadership, and the Czech government in resignation may not be able to provide that leadership.
I am personally most worried about the possible implications on the Czech ratification of the Treaty of Lisbon.
In a joint declaration attached to the political agreement for new options for reduced VAT rates, Bulgaria, Germany, Denmark, Lithuania and Estonia called on other EU states to show restraint in applying reduced rates, since they lead to reduction of the tax base, artificial redistribution of employment without new jobs creation, and increase the administrative burden. The signatories of the declaration will not use the new option for reduced VAT rates
The argument is old, as we are reminded by Jean Quatremer. It is mainly between Germany and France, mainly on restaurant services. The question about the effectiveness of the reduced VAT rates remains under discussion.
The extraordinary EU summit on 1 March has not backed proposals for a financial bail-out plan for Eastern Europe, and new member states in particular.
The only specific decision of the summit was to instruct ECOFIN to work closely with the European Commission to draw up elements to help countries facing temporary imbalances “on the basis of all available instruments”.
It remains to be seen what these instruments will and will not include.