Economic situation serious, panic not needed  - Czech politicians Lany, Central Bohemia, Jan 2 (CTK) - The economic situation in all Europe is serious, but it is not necessary to panic, Czech President Vaclav Klaus and Prime Minister Petr Necas (Civic Democrats, ODS) agreed at their traditional New Year´s dinner in the presidential chateau in Lany today. Necas said they both believe that politicians should now act with great responsibility and not to paint "various apocalyptic, catastrophic scenarios." He said this would only arouse citizens and firms´ fears and they would be afraid of buying goods and making investments. "This subdues both domestic consumption and capital creation in firms," Necas said. He said the government must view the economy realistically and be ready for all scenarios that may occur. "This does not mean, however, that a crisis scenario starts to be automatically applied," Necas said. This year´s state budget counts with a deficit of 105 billion crowns, compared with 135 billion last year, revenues at 1,085 billion crowns and expenditures at almost 1,190 billion crowns. The budget was based on a 2.5 percent economic growth prediction while the outlook at the end of 2011 decreased it to around 1 percent, which would lower revenues by 17 or 18 billion crowns. Klaus said he as well as Necas are serious about the situation and they are aware of that economic growth may further slow down in all Europe which would have a negative impact on the Czech Republic. "Please do not let us succumb to panic," Klaus said. He said the government undoubtedly has some instruments to cope with the situation, but it cannot reverse the deep European crisis. Necas said he and Klaus also spoke about what steps the government can take to encourage economic growth without stimulating it through "artificial subsidies from the public budgets." Klaus also appealed to Czech politicians to be loyal to the country. "I will also appeal to the (government) coalition to be loyal to the government. I think that the government also needs it very strongly," Klaus said. He was probably alluding to frequent discords within the centre-right government coalition that comprises the ODS, TOP 09 and Public Affairs (VV). Klaus said the Czech Republic´s development is also slowed down by that necessary steps on the Czech political scene are blocked [by the government parties] for prestigious reasons. "I would be very glad if this were not so this year," Klaus said. Klaus and Necas also briefly touched on a possible loan to the International Monetary Fund (IMF) to help stabilise the euro zone. Klaus, who has long criticised the euro project and who considers the euro salvation plans fundamentally bad, said Necas knows his "resolute" position. Necas said the government has not yet made a decision on the loan. He said his personal rather sceptical opinion squares with Czech National Bank (CNB) governor Miroslav Singer´s. The loan would be provided from the CNB reserves. "We continue analysing the situation, consulting with foreign partners," Necas said. The dinner was also attended by Klaus and Necas´s wives, Livia Klausova and Radka Necasova. ms/dr/pv   