Czech RepublicSeptember 2012 | Risk Summary
There is increasing potential for the Czech government not to see through its term to 2014 following a failed attempt to pass a 1% VAT tax hike through the Senate. Prime Minister Petr Necas of the Civic Democratic Party (ODS) has vowed to resubmit the bill tying it to a vote of no confidence by the end of the year. The coalition parties have managed to garner enough support to vote down no confidence measures before in order to avoid an early election. However, dissention comes from within the ODS party this time around, with a number of members against further tax hikes in the current economic climate. In the event of early elections, there is a high potential for the formation of a centre-left government which would likely roll back a number of austerity measures.
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