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13.05.2009

May 7, 2009 (the date of publication in Russian)

Grigory Tinsky

THE SICK CAPTAIN OF THE EUROPEAN SHIP. Part 1

Czech Republic, the EU presiding state, is sinking into a political and economic quagmire

A COALITION OF BOUNCERS

When the torch of EU chairmanship was passed from France to Czech Republic on January 1, 2009, one could expect with high probability that during the first half of this year, the European Community would hardly achieve a breakthrough in any of its current complicated tasks. The relevant forecast, presented in this author's December 2008 article, has confirmed. Moreover, the latest developments in Czech political life have made the perspectives even worse, significantly aggravating the existing negative tendencies.

After a long period of instability, the Czech government eventually fell, and PM Mirek Topolanek failed to keep in his position until the shift of chairmanship. The coalition of the Civic Democratic Party (ODS), Christian and Democratic Union – Czechoslovak People's Party (KDU-CSL), and the Green Party (SZ) disposed 103 of 200 seats in the Parliament, while the opposing Social-Democrats and Communists held 97 seats. This alignment enabled the coalition to withhold the opposition's initiatives Ц including the public referendum on deployment of US ABM facilities in Czech Republic Ц by a slim margin. During three months, the coalition four times rejected the confidence vote. The situation unexpectedly changed when four MPs Ц ODS's Jan Schwippel and Vlastimil Tlusty, and ex-SZ Olga Zubova and Vera Jakubkova, raised their voice against the government.

Mr. Schwippel and Mr. Tlusty had long confronted Mirek Topolanek for ideological reasons. They regarded the government policy as too leftist and too pro-Brussels. Their campaign against Topolanek contributed to the government's self-discredit, playing into the hands of leftist parties in the municipal elections. The two MPs also supported the opposition in the government-introduced vote on restitution of the Catholic Church's property and related compensations. At the same time, they claimed that the resignation of Topolanek's cabinet would be "salutary" for true rightists.

In their turn, Ms. Zubova and Ms. Jakubkova had got into a conflict with the Green party boss Martin Bursik, Vice PM in Topolanek's government. The row started when Mr. Bursik, dissatisfied with Ms. Zubova's absence at the Presidential vote, expressed his discord by distributing e-mail messages, in which the lady was called a "cow". Accidentally receiving the same message, Ms Zubova launched a scandal in mass media. At the same time, she and Ms. Jakubkova shared the opposition's reservations over the ABM systems, co-signing the address to the Constitutional Court on legitimacy of the US-Czech treaty. Being eventually expelled from SZ, the two dissident ladies established a splinter Democratic Green Party.

The ABM issue became one of the most sensitive issues in Czech policy. Desperately trying to promote the bill on the US radars, Topolanek actually opposed his will to that of the Czech majority, while his attempts to sabotage the referendum contradicted to the basic democratic principles laid in the foundations of his own party.

In addition, Mr. Topolanek's personal behavior deteriorated his reputation in and outside Czech Republic. European TV channels highlighted the PM's physical assault on a journalist who dared to ask an unpleasant question. Another journalist was beaten by Mr. Topolanek at a funeral ceremony of the PM's uncle.

Mr. Topolanek's public statements contributed to the image of a bouncer with clinical lack of self-control. For instance, he compared the fall of his government with the 1938 Munich plot and the 1968 Soviet intervention. He interpreted this political disgrace as a conspiracy of President Vaclav Klaus, Prague City Governor Pavel Boehm, and MP Vlastimil Tlusty, all three allegedly motivated with envy towards his person. At the international arena, Mr. Topolanek got into a scandal, labeling Barack Obama's anti-crisis plan "a pathway to the hell", which sounded indiscreet while he was yet in his capacity of EU Chairman.

Scandals have also emerged around two of Topolanek's deputies Ц Martin Bursik (SZ) and Jiri Cunek (KDU-CSL). The former was ostracized for tax evasion, while the latter was blamed for taking a 500,000 Kc bribe, illegal accepting social allowance, along with sexual harassment of his secretary. Though none of these allegations was confirmed, the image of the politicians was irreversibly ruined, and this accelerated the government's agony.

ELBOWING FOR SEATS

Mr. Topolanek's adequacy was repeatedly doubted when after the described failure, he decided to take charge for establishing the new government. President Klaus and the opposition parties were cool towards this effort, despite real difficulties in making up a new coalition.

The problem of creating a new coalition emerged from reluctance of the Social-democrats to share government positions with the Communist Party of Czechia and Moravia Ц though the Communists had more seats that the Christian Democrats and Greenies taken together. The proposal of a broad coalition, introduced by the Communists, was also rejected. The later attempt to establish an anti-Communist alliance, involving Social Democrats, failed as well, as the Christian Democrats and Greenies rejected this option. Jiri Cunek complained that his party "looks like a peyote without water, driven into the corner" of the Parliament. KDU-CSL's reluctance to join the coalition was interpreted in mass media with Cunek's hope that the new government is doomed to fall within a short period of time.

Meanwhile, some of Cunek's allies disagreed with his line and split the party. This operation was initiated by ex-Finance Minister Miroslav Kalousek, who had been replaced by Cunek as party chairman two years ago. At the same time, he obviously hoped to gain the same position in the new government. His ambitions were supported by Vaclav Klaus, who expressed his confidence to Mr. Kalousek, "whose service is indispensable in the period of crisis".

FISCHER'S "APOLITICAL" GOVERNMENT

After a while of maneuvers, involving all the major political forces, the Government was entrusted to Klaus's old friend, Statistic Authority Director Jan Fischer. Ostensibly, the government is provisional and "technical", and has to convey power to a new government after snap elections, scheduled for October 2009. In fact, a government can't help being political, as it is evident from the current intrigues around influential posts, in which Jiri Paroubek, the ambitious chair of Social Democrats, is especially active. The explanation is simple: party functionaries are seeking advantages in sharing the next year's budget expenses.

Meanwhile, the population is concerned of the pockets of its own. Topolanek's government had collapsed on the background of exacerbation of the economic crisis. Industrial production has been declining during four months. Its February 2009 output was by 23.4% lower than that of February 2008.

The February 2009 figures display a 36% contraction in metallurgy, a 31% decline in machine-building, 14.3% in construction (20% in housing), and 28% in automotive industry. The decline of Czechia's GDP naturally results in a rise of unemployment that has reached the figure of 7.7% Ц twice as large as in 1993, and four times larger among handicapped persons. In the industrial outskirts of Ostrava, unemployment amounts to 34%. Meanwhile, inflation has risen by 2.3%, while communal tariffs soared to 27, gas by 24%, electricity by 11, and running water by 8%.

Quite naturally, the population's liabilities to public banks have greatly increased, amounting to Kc 900 billion (around $45 billion) by April 1, while the banks' monthly incomes don't exceed Kc 12 billion. The Czechs can be soothed only with the scandalous figures of private debts of their politicians. In particular, Interior Minister Ivan Langer owes Kc 6.3 million, and Mirek Topolanek Ц 4.6 million. Czech foreign debt comprised Kc 1.5 trillion ($75 billion) on January 1, 2009 Ц on the background of a 22% decline of exports and an annual outflow of capitals from the country estimated in $5-6 billion.

The direst circumstance is an utter absence of any anti-crisis strategy. Being focused on petty inter- and intra-party brawls, the Czech political establishment has in fact shifted the whole burden of the crisis on the population's shoulders. Shortly before resignation, Topolanek's government abandoned anti-inflation protection of pension arrears.

The scheduled October elections are likely to radicalize the confrontation between the Communist opposition and the presently dominating parties. The Communist Party of Czechia and Moravia, with support from trade unions, is going to introduce a social policy package, supposed to improve the well-being of industrial workers and unemployed. The package will definitely guarantee CPCM new seats in the Parliament, as the Topolanek government, as well as the incumbent Fischer government, hasn't managed to achieve any social improvements.

(To be continued)


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