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Czech Church Settlment to Be One-Time Gap Boost, CTK Says

Nov. 28 (Bloomberg) -- The Czech Republic’s settlement with churches for property confiscated by the Communist regime will be a one-time increase in the 2012 fiscal deficit, the CTK newswire reported, citing Finance Minister Miroslav Kalousek.

The parliament approved this month a bill under which churches will get back property valued at about 75 billion koruna ($3.8 billion) and receive payments totaling 59 billion koruna spread over 30 years, CTK said. The bill helps settle claims for property confiscated by the state during the Communist regime from 1948 to 1989.

European Union methodology requires that the entire cash part of the settlement be included in this year’s budget balance even though payments will be made in the future, according to Kalousek. As a result, this year’s deficit will be about 5 percent of economic output, he said, compared with the ministry’s previous estimate of 3.2 percent gap.

The rating agencies aren’t considering this budget accounting operation as a deviation from the government’s fiscal strategy, the newswire quoted the minister as saying.

To contact the reporter on this story: Peter Laca in Prague at placa@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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