As an economist, what will you most associate with the past year 2023 in the Czech Republic?
I will mainly associate it with the concurrence of a series of medium-term crises. First of all, we are faced with an unnoticed demographic crisis. This means that our demographic structure is changing, in the sense that our population is aging and numerically very weak groups are entering working age. Not much is known about this crisis, because it is overshadowed by the migration of more than a quarter of a million people, mostly from Ukraine, so we don’t see much. But if you consider most companies that would like to grow, one of the main problems is the lack of labor, in addition to energy prices.
The second impression compared to last year is the worsening of the mood of analysts, who during the year systematically worsened the estimates of all macroeconomic indicators, with the exception of the balance of payments, especially with regards to economic performance. We didn’t make it through 2019, and not only did we not make it through last year, we probably won’t make it into 2024 either.
The third characteristic of the finished year, and related to it, is high inflation, which crushes the purchasing power of families and also affects companies’ forecasts in terms of costs and how they should calculate products.
The fourth factor of the past year, unfortunately, is the absolutely unconditional intervention of the Ministry of Finance in economic events, in the sense that, in a moment of stagnation, the recovery package does more harm than good, and this will only be evident this ‘year. year. This last year has been marked by the warning that the road doesn’t lead here. But the government does not pay attention and care about short-term effects, short-term savings. But as Martin Fassmann says, no one achieves prosperity through cuts.
Photo Gallery: – Looking back at the year 2023
Czechs are facing falling living standards, the highest energy prices in the entire European Union and now the highest inflation. Our food prices are higher than in neighboring Germany, which is much richer. What could not have happened? What is caused by external influences and what have we “done” ourselves?
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Does Petr Fiala represent the Czech Republic well?
voted: 48511 people
The fact that we have cozied up to the Germans in their Energiewende or Green Deal is our stupidity, our incompetence and inability to correctly calculate this huge, pernicious macroeconomic and socially destructive operation and to bang our fist on the table and say: “So in this way, please no! Germans, to hell with this idea. Solving your problems is your business, but don’t scare Europe.” If people say they are dissatisfied with energy prices, then ask the Prime Minister what he has agreed with the six energy barons, how they will resolve energy prices, how the government’s anti-energy measures will be addressed. I already said it was two months ago the time has come to file criminal charges for far-reaching damage in an organized group. And I still insist on this. If the government does not have good advisors and they do not tell it how great a multiplier energy is, which is not that it is omnipresent, but its price fluctuations practically everywhere shake the calculations, shake the economic situation of companies, families, just everything , then the government only convinces of its incompetence and that its members are completely mistaken in their duties. They managed to win the elections with the antibabis, but after 2023 they found themselves with a truly devastated country. And, unfortunately, the prospects are no better.
In his Boxing Day speech, Prime Minister Petr Fiala reincarnated as a philanthropist, but at the same time, two weeks earlier, he beat up citizens who allow themselves to be in a “stupid mood” and who never solved any problem with skepticism, anger and snobbery. “We live in one of the safest countries in the world. We practically do not experience unemployment. We belong to the most developed countries on our planet, economically and in fact from every point of view. The quality of our public services is high, even compared to the most rich. We have a functioning democracy,” the ODS head said. Is there anything you disagree with him about?
I wouldn’t blame him at all. Because if he says that we are one of the safest countries it is because ultimately no one is interested in the Czech Republic. The Czech Republic represents only a transit corridor in the event of an attack on Russia from west to east. And this is the end. We are of no interest to anyone because we are politically subservient to the United States, economically insignificant, and exhausted because we have lost a functional economic model and do not have a new one. If there’s one thing I admire about Mr. Fial, it’s that he managed to recruit a group of publicists who could simulate these pink clouds in a very dark sky. He may fool a few servile snobs, but he cannot fool the majority of the nation.
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And how is the majority of the nation doing?
It’s been three weeks since colleagues at the Institute for Research on Labor and Social Affairs announced the completion of a fantastic study examining wealth stratification in this republic. I will briefly explain what they invented. They divided nearly 11 million inhabitants of this republic into five groups of equal size, approximately 2.2 million people. And they found out how these five groups own property, how much property they own. The whole society is 100% owned, but the top twenty%, experts call it the first quintile, the poorest only hold 0.2% of the property! Almost nothing. In the other groups the share rises to 5, 6, 8%, while the richest 20% of the population owns 80.5% of the assets. If we consider how many times more property belongs to a person in the top 20% compared to those in the poorest group, the number is 400 times higher. The research was international, so they found that we are already the winners in Europe and that we are already approaching the United States of America with 80.5%, but this differentiation took two hundred years before they got there. That is why Americans are on the brink of a civil war, where the abysmal conflict between rich and poor is masked by the rivalry between Republicans and Democrats, but it is only a shell, and the internal contradiction is a huge wealth. inequality.
Was the increase in wealth inequality an accompanying phenomenon also last year in the Czech Republic?
This is perhaps the fifth factor that I didn’t mention that surprised me last year. Even though I have been studying the question of income and the structure of families based on wealth for some time, albeit not in depth, I was still very surprised by these numbers. They are shocking and testify to the fact, and this is very important, that the last year has been characterized by a hugely distorted tax system, when in thirty-four years a group of very rich people have achieved such legislative conditions in the creation of tax laws tax on legal entities and individuals, mainly natural persons, in property taxation and so on, that labor is highly taxed and property is very low taxed. This is the source of growing inequalities. And hence, apparently, the “stupid mood”, which the Prime Minister simply cannot interpret correctly. The problem is that there is a significant portion of society that is significantly impoverished. And blaming Babiš or Putin is total weakness. He should immediately fire advisors who whisper to him.
However, government supporters say people have enough money when they fill up, and not just before Christmas, shop and fly for winter holidays abroad. Don’t complaints that we are worse off lose their meaning and validity?
This is extremely stupid demagogy. Go look in the shops and watch the people. The way they are dressed already says what their status is. And look at how many people take an item off the supermarket shelf, look at the price and put it back. I’m ashamed to shop in those supermarkets today. But of course there are families pushing overcrowded carts. At a time when two-thirds of employees have a below-average income, which has been steadily declining for the past two years, it makes no sense to talk about the fact that this republic is doing well. It’s scandalous. This is an insult to those people who spend every penny. I don’t have a decent term for it, everything else is actionable. The government simply doesn’t care.
Photogallery: – Staromák, markets and prices
According to a recent analysis by Bloomberg, inflation in the Czech Republic will fall sharply at the beginning of this year, reaching around a quarter of the level at the end of last year. The Fial government will thus be able to declare victory over inflation. Economist Lukáš Kovanda reacted by predicting that when citizens realize that the increase in prices has stopped and are “correctly” explained to them that this is due to government activities, a substantial part of public opinion – the voters – he will believe it. , which will increase the likelihood that the Fial cabinet will govern until at least 2029. What are your economic expectations for the Czech Republic this year?
I have great respect for Mr. Lukáš Kovanda’s observations, because he is a person who, before saying or writing something, calculates it. So he knows that when we talk about inflation, water is poured into a basin that has a very crooked bottom. If, and this is indisputable, monthly increases in inflation are already reaching negative values, that is, the price growth rate is slowing down, it is only slowing down, but not decreasing. If there is one thing I agree on, it is that inflation will no longer be as catastrophic as we have experienced it for the past two years, including last year. Yes, inflation will fall and I can only hope it falls below 5% in 2024 from 23%. This is about double what the government estimates. But if someone passed off even that five percent as a success and as a reason to vote again for this party, so deceived by propaganda, agitation and those PRs, I don’t believe it. After all, he looks at how trust in government is declining even among his voters. I do not accept at all that these five wheels continue to rule. I wouldn’t even be surprised at all if 2024 were, among other things, marked by early elections.
I recorded a recommendation that the government would benefit from having within it a deputy prime minister for economics such as Martin Jahn, who held this position in 2004-2005. Would it help economic ministers or could they manage and manage without such a supervisor?
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Do you agree that the SPOLU coalition should go to the European elections together?
voted: 35826 people
Martin Jahn is a highly educated and qualified person, but his tenure in the government was very short. Jirka Rusnok, hidden everywhere as an advisor to the insurance company’s board of directors, is also a quality person when it comes to macroeconomics. Or is it his deputy governor Marek Mora, who passed to Mr. Stanjur as deputy. I know many of those capable people. But I fear they are not being listened to. That’s the problem. Ideologues have a say and decisions are made politically. But this is not just Strakovka’s problem. Look at Brussels. It’s one stupid thing after another that comes out of there. Europe is ripe for major upheavals. This is the question of the impasse in which this second decade fad of multicultism, political correctness and ignorance of expertise has arrived. More drums are played and more fanfares are won than can be counted. Unfortunately.
Prime Minister Fiala spoke of this year as a year of hope. What would have to happen for this to be true?
I’ll say it differently. When I talked about the four or five crises, each of them represents a relatively significant problem in itself. But we have their competition, the crises are intertwined, they influence each other and there are some multiplications. There are few people who have the ability and authority to find a cure for this confluence of ills. I don’t know these crisis managers. I know some intelligent analysts who can analyze the problem very precisely – it’s not just Lukáš Kovanda, there are more of these people, Ilona Švihlíková and others – but I already see a relatively large deficit in the ability to prepare a conceptual solution for the ways out of this misfortune. It’s not about one person, even the brightest, but about at least a group of two or three dozen people who are united, have a vision and have the power to move the rudder from the murky waters of stagflation to prosperity.
That’s what I mentioned a while ago. The Czech Republic has exhausted the effects of the neoliberal model, which proved useful in the short term, but disastrous in the long term. And we are in a trap from which we don’t know how to get out. And when external influences come into play, when we have managed to antagonize the Arab world, Russia, China and I don’t know who else, then we cannot be surprised to find ourselves in such difficulties. It is not just a question of the government’s internal incompetence, but it is a question of Europe’s strategic geopolitical thinking, which is losing ground and the level of panic is only increasing from Madrid to Kiev. What can you do.
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The item contains labels
Babiš , Brussels , EU , Fiala , inflation , crisis , Germany , Stanjura , Šulz , government , Energiewende , Green Deal , energy barons , wealth inequality
author: Jiří Hronik
2024-01-01 04:15:00
#Obscure #estimate #year #Concomitance #crises #Early #elections #Czech #Republic