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Tuesday, June 06, 2006

Czech Republic politics: Czechs vote for deadlock


The indecisive outcome of the Czech parliamentary election, held on June 2nd-3rd, is nothing new for the country. It has had to create unwieldy and ideologically incoherent coalitions—or unstable, minority governments—after every election since 1996. But investors should not be unduly worried. Most of the big post-communist transition reforms have already been accomplished, and the economy is growing at a healthy and sustainable pace, so the need for effectiveness in government—-which would have been most desirable during the 1990s—is no long an overriding priority.

Still, there are important decisions and policy initiatives that do need to be taken—such as preparing the economy for euro membership, and health, pension and tax reforms—and with no end to the political deadlock in sight, there are growing calls for electoral reform.

Unsolvable equations

As the results stand, it is virtually impossible to construct a majority coalition, let alone one that is ideologically coherent or acceptable. The nominal winner was the right of centre Civic Democrats (ODS) with 81 seats in the 200-member chamber; the incumbent centre-left Social Democrats (CSSD) fared better than expected but trailed with 74 seats.

But as with many proportional representation systems in the transition region, the prospect of forming a majority government depends on two other factors: which smaller parties surpass the 5% qualifying threshold for seats; and the success of any extremist parties —in this case the unreconstructed Communist party (KSCM)—with whom no mainstream party will formally work. The Greens—a moderate environmental group—produced the big surprise, and will enter parliament for the first time with six seats. They will join the longer standing, centrist Christian Democrats (KDU) which won 13 seats. Meanwhile, the KSCM did worse than opinion polls had predicted, winning only 26 seats (one third fewer than in 2002), quite possibly because the CSSD had hinted at some form of tacit co-operation which may have troubled voters who only backed the KSCM as a protest vote. But the resilience of the unreformed communist party—a unique phenomenon in Central Europe—remains a debilitating restraint on coalition building.

The communist foothold is far from the only shortcoming in Czech politics. The bitterness of personal rivalries continues unabated, with several below-the-belt allegations of corruption, organised crime, paedophilia and Stalinism flying across the political divide. Personality-based politics has long been a feature of Czech party politics, with splits and feuds based on little more than individual vendettas and differences in style rather than ideology.

The results provide no obvious clues as to the future make up of a government: the ODS, as the largest party, will have first stab at forming a government and its obvious partner is the KDU. But they will need at least one more ally. Even if they could persuade the Greens to join the government, with only 100 seats out of 200, this would still not provide a workable majority. An alternative could be a minority centre-right administration comprising just the ODS and KDU, which would have some ideological coherence (if little stability), but would have to rely on support either from the Greens or the least disciplined MPs in the opposition parties on key parliamentary votes. A minority centre-left CSSD/KDU/Green coalition might also be feasible, and would appear more logical coherent. But to survive it would require support from the Communists—and neither the KDU nor the Greens will countenance any such deal. A leftist CSSD/KSCM alliance, which would account for exactly half of the seats, is also unlikely as the CSSD's own constitution bans any formal arrangement with the communists.

Another option would be an ODS/CSSD grand coalition similar to that operating in Germany. The ODS is still more eurosceptic than the CSSD, and the right-wing party favours a radical lowering of corporate taxation as part of a 15% flat tax system. But the policy gap is not unbridgeable, and it would be easier to hammer out a deal with one adversary, rather than with two lukewarm potential allies in a coalition agreement that would not even command a majority. However, the pre-election insults that flew between the ODS leader Mirek Topolanek and the CSSD's chairman and outgoing prime minister, Jiri Paroubek, won't help them bridge their policy differences. Moreover, neither party leader is likely to step aside to facilitate such a grand coalition. There is, however, a precedent: the indecisive election result of 1998 which had pitted the then leaders of these two parties—Vaclav Klaus and Milos Zeman—against each other, did not prevent these two bitter rivals subsequently from signing an "opposition agreement" under which the ODS agreed not to support a no-confidence vote in a minority CSSD government.

A never-ending story

The Czech Republic has been engaged in similar coalition wrangles ever since the ODS-led coalition lost its majority in the 1996 general election. This seemingly permanent state of political instability has renewed calls to revise the electoral system. Electoral reform had been tabled before the 1998 election, (which also proved inconclusive) but elicited fierce objections from the then president, Vaclav Havel, who feared that electoral tinkering would not only undermine trust in the emerging democratic process, but would allow the two main parties to carve up political life between them in a stifling, Austrian-style power-sharing arrangement.

Mr Havel was probably right to be concerned about entrenching a status quo in a society that needed a radical overhaul of its economy; the needs of a transition economy are, arguably, different from those of more developed economies in that political effectiveness in government is at a premium when tough reforms must be pushed through. With Mr Havel having long since exited the political stage, this issue may now be revisited. But as the urgency to reform has dissipated, the country safely ensconced in the EU, and the economy booming, attempts at electoral reform may serve primarily to confirm Mr Havel's worst fears.

Source: ViewsWire Europe
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