A scrappage incentive scheme has been vetoed in the Czech Republic by the country’s president.
Despite being passed in parliament, Vaclav Klaus has refused to pass the law and it now must go back to the lower house for amendments.
In a statement, Klaus said, “This is a law that is discriminatory, non-systemic, with many legislative mistakes and, in its final consequence, with a highly uncertain positive effect.
“It favours industry at the expense of other sectors of the economy and within that it gives preference to short-term interests of several strong players from the automotive industry.”
The Czech economy shrunk by 3.4 per cent in the first quarter of 2009 and despite Skoda, Hyundai and PSA/Toyota all having factories there, most of the cars sold in the country are imported.
Critics of the Czech scrappage incentive scheme said it would put an unnecessary strain on the government’s already stretched budget. The scheme would have seen motorists trading in their old car receive a discount of around £1000 on a new one.
Similar scrappage schemes across Europe have to helped boost new car sales; the UK's own policy improved its recent figures.