Thousands of people gathered in the streets of Prague, the Czech Republic’s capital, to oppose the government. The country is currently experiencing record-high inflation as a result of rising energy prices induced by the Ukraine-Russia war.
The Czech citizens are also demanding the government to stop the country’s support for Ukraine.
This protest is organized at Prague’s Wenceslas Square by a new political group known as PRO. The participants of this rally have demanded from the currently ruling centre-right government of Petr Fiala to resign.
Ever since the Russia-Ukraine belligerence began in February 2022, Prague has been aiding Ukraine with both militaries as well as humanitarian aid. Due to this emboldening on the part of the ruling government, the citizens have begun to believe that the government is more concerned about Ukraine than focusing on the issues faced by its own citizens.
Prague witnessed an inflation rate of 17.5% in January, it dropped slightly to 16.7% in February. The PRO political group has been seen blaming the ascendancy of the European Union behind this.
WHY IS INFLATION INCREASING IN CZECH REPUBLIC?
The prices in the Czech Republic are increasing at a very high rate as a result of this the cost of living is getting expensive each passing day and the situation is worsening in the country.
The effect of the pandemic and the Russian invasion of Ukraine has left most economies suffering but the Czech economy is an exceptional example of these crises. No country around the globe except the Baltic region has observed such a high upsurge in prices.
According to economists, one of the main reasons behind this high inflation is that the Czech Republic has the lowest employment rate in Europe and this when combined with baseless fiscal policies has kept the inflation rate high even before the pandemic struck.
Another reason behind the country’s high inflation rate is the larger share of energy and food contributed by Eastern European countries in comparison to wealthier countries.
More and more households are facing the problem of high gas and electricity rates. In most European countries, governments intervene in the market using various regulations and capping prices but in the case of Czech, the government only regulates the prices for the distribution and transmission of energy. For example- the Slovakia government for three years had frozen its electricity prices for its people. The Slovakia government also adjusts the cost of commodities and electricity.
Another attribute contributing to high inflation is that the government led by Petr Fiala has constantly been rejecting any blanket regulations. Blanket regulations are a methodology used for making general laws for specialized niches.
CZECH REPUBLIC AND EUROPEAN UNION
The Czech Republic became a member of the European Union in 2004 and has been a part of the Schengen area since 2007. It is a parliamentary republic with the prime minister as the head of the government and the president as the head of the state.
The Czech Republic was formed in 1993 after the split of Czechoslovakia into Czechia and Slovakia.
Since its joining the European Union, The Czech Republic has adopted fiscal and monetary policies that aim at aligning its economic conditions with its neighboring European Union countries.
The debate on whether the Czech Republic should adopt the Euro or not has been in discussions since 2006. With the change in ruling political parties and governments, there has been a mixed reaction from the in-power leaders towards this. The current Petr Fiala’s cabinet that emerged victorious in the 2021 legislative elections has no intentions of adopting the Euro within its term.