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>Czech political scandal: Staged photos trigger low farce

>And, as they say on all the best shopping channels, did you think I was done? Done with Czech politics that is. Just when you think it safe to avert you eyes from the CR and focus on other big issues like the Slovenian election, scandal erupts. And this is not just some boring any old tale of corrupt payments and dubious conflicts of interest.

Oh no. In the twinkling of an eye – as only Czech politics can – we descend from ideological battles over public services and tax-and-spend to low farce that anyone scripting a political satire would probably reject as implausible. Dissident Civic Democrat flat-tax advocate (and ex-Finance Minister in the short-lived centre-right coalition of 2006), Vlastimil Tlustý (pictured), was so shocked by the corrupt and cynical behaviour of his fellow ODS deputies (did it really taken him this long to discover it?) that he started recording them secretly on a dictaphone and – presumably when this didn’t quite yield up what he wanted – teamed up with journalists from TV Nova and the daily MF Dnes with a rather bizarre entrapment scheme: he staged some ‘compromising’ photos of himself and a blonde filmed in a hotel swimming pool (here, if you really must look, although the most comprising thing revealed is that Tlustý could do with losing a few kilos). The journos, posing as private detectives, offered it various of his party colleagues, who would – it was assumed – jump at the bait showing all the world just how very sleazy they were.

A prime ministerial aide turned down the offer of the pics of Tlustý and the unnamed blonde, but, alas, young ODS deputy Jan Morava felt duty bound to get material and even told the ‘detective’ in a secretly filmed meeting that he also wanted to arrange the taking on some surveillance picture on a Green MP’s daughter with himself, so he could blackmail or intimidate her mother into backing the government: the Greens, I should say, are divided on whether to stay in the centre-right coalition government and, to complicate, matters further are just at this very moment having a make or break congress to decide the leadership and future direction of their party. It’s unclear what Morava’s exact relationship with the MP’s daughter was, although evidence in the press suggests some kind of friendship or romance, but you get the general idea…

The political upshot of all this? Prime Minister Topolánek calls for both Tlustý and Morava to leave parliament and makes an emotional apology to the Greens at their congress and begs them to get their act together (and stay in the coalition). He says he is appalled and shocked at such filth and feels like leaving politics. Possibly true at an emotional level, but can you really get to the top of Czech politics and have such a delicate conscience. I rather doubt it.

The odds on the government collapsing have just shortened, I would say. Who knows? Perhaps that was the whole idea all along.

>Any tax you can do, I can do flatter…

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The Sofia Weekly carries the following story about the GERB party of Sofia’s mayor Boyko Borissov, suggesting that free market fiscal populism centring on flat taxation as magic bullet for all economic woes is alive and well in SE Europe. The package seems an attempt to outbid the current Socialist/centrist-liberal coalition’s recently passed 10% flat tax package. Despite Sofia’s chronic rubbish disposal problems, Boyko Borissov seems set to romp home in the poll to run the nation’s capital ahead of a Socialist, far-right and centre-right unity candidates- the latter just agreed by the largest two squabbling remnants of the old Union of Democratic Forces. It will be interesting to see whether GERB can repeat the trick in national elections with flat tax as their main selling point. So far the tactic has garnered large but ultimately insufficient support for centre-right parties trying this tack in Poland and the Czech Republic.

Bulgaria’s GERB Party Wants 7% Flat Tax

Bulgaria’s self-proclaimed centre-right party GERB presented on Wednesday its ambitious economic agenda for the 2009 parliamentary polls, which includes a 7% flat tax rate and massive privatisation of state assets.The party of Sofia mayor Boyko Borissov, who styles himself as the biggest opponent of the country’s ruling three-way coalition, was founded last year and previously had no cohesive economic programme. In addition to arguing for a lower flat tax than the 10% that the current cabinet plans to adopt starting next year, the party’s plan includes a monthly tax-exempt minimum of BGN 1000. The average monthly wage in Bulgaria in the second quarter of the year was BGN 406.Should GERB win the elections and complete its four-year term, its policies can bring a doubling of monthly wages, which could reach as high as BGN 1500-2000, party economist Stoyan Mavrodiev told reporters.Another key feature of its economic agenda is privatising all state assets in which the state has a majority stake, which includes a bank, the postal company, coal mines, several power stations and tobacco monopoly Bulgartabak, among others. Furthermore, key parts of infrastructure, such as motorways, airports, ports and bridges over the Danube should be given out on concession, while the state should step out of health insurance and healthcare, which should become private, according to the programme.That would allow the cabinet to reduce the annual budget to the equivalent of 30% of gross domestic product (GDP), as opposed to the current 40%.”

>Bulgaria: Flattened by flat tax?

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Bulgaria’s new system of flat corporation and income tax – introduced at the start of this year by a government led by those unlikely free marketeers the Bulgarian Socialist Party – has, reports the Sofia Echo (citing Bulgaria’s office of national statistics) mainly clobbered those on low incomes and freelancing in liberal professions due to its abolition of many tax allowances. The logic, as with many weakly reforming post-communists states that have adopted flat taxation, seems to be to spur economic growth increasing the overall incomes of those at the bottom and then use the improved state of public finances to pay some targeted compensation to badly affected loser groups. These impacts seem to stem from its very low level in Bulgaria (10%), which makes it attractive to investors and business however, and the lack of a clear package of compensation for groups such as families with children, reports a subsequent SE. This is an interesting contrast with the proposed Czech flat tax trumpeted by the Civic Democrats in 2006, which carefully engineered things to offer some protection low income (or, at least lower earning) groups – mainly I think via some allowances and a proposal for a flat basic income type benefit payment to all citizens – and the much watered down proposal of the current Civic Democrat-led minority government for flatter taxes, which inadvertently clobbered middle income groups.