The Czech parliament has overridden a presidential veto and given the go-ahead to a scrap-for-new scheme to boost car sales.
The scheme, promoted by left-wing parties, got support from 101 lawmakers in the 200-seat legislature to override a veto by President Vaclav Klaus, a liberal economist who had labelled the scheme “discriminatory”.
The Parliament has been split over such a scheme because it only benefits one industry. Former finance minister Miroslav Kalousek said the measure aimed at a single segment of the industry was “a message to staff in all other segments and services that you don’t give a damn about them.”
Under the scheme, people who buy a new car worth up to CZK500,000 (EUR19,654, US$28,644) in exchange for a car at least 10 years old will get a subsidy worth some EUR1,180 (US$1,720).
It is now up to the government to decide whether the programme will be launched and when.
Czech car makers – Skoda, the Toyota/PSA JV and Hyundai – had benefited from a similar scheme introduced in Germany amid the credit crisis and had called on the Czech government to take a similar step.
However UniCredit Bank analyst Pavel Sobisek told Agence France Presse that he expected the current government would not introduce the measure although it’s now allowed by the law, since it would raise the already bulging state budget gap.