Czech Republic


Executive Summary

Coalition government shows tensions. Conflict-of-interest bill targets minister
In the period from November 2015 to November 2016, the Czech Republic was governed by a coalition government. The government was led by Prime Minister Bohuslav Sobotka of the Czech Social Democratic Party (Česká strana sociálně demokratická, ČSSD ). Junior coalition parties included the Movement of Dissatisfied Citizens (ANO), led by billionaire media owner Andrej Babiš, and the Christian and Democratic Union - Czechoslovak People’s Party (Křesťanská a demokratická unie - Československá strana lidová, KDU-ČSL), which returned to parliament after the snap elections in October 2013. With regional and Senate elections held in October 2016, and parliamentary and presidential elections approaching in 2017 and 2018, tensions in the governing coalition have grown. The strong showing of the ANO in the polls made the ČSSD nervous and exacerbated rifts within the coalition. Conflicts escalated around the parliamentary vote on the amendment of the conflict of interest bill in autumn 2016. Directed against Babiš, this bill will prevent any individual from holding a government position while also owning a media outlet, and will prevent any company in which a member of the government holds more than 25% of the shares from participating in public procurement processes or receiving public subsidies, including EU funds. The bill received overwhelming support from the governing ČSSD and KDU-ČSL, together with opposition parties, but was opposed by the ANO and the president. The tensions within the government hampered effective decision-making. The prime minister’s lack of control over the government was demonstrated by his inability to persuade coalition partners to replace ministers after the elections in October 2016. The governing coalition seems to have survived only because both the ANO and KDU-ČSL hoped to further strengthen their positions in the following months.
Anti-corruption progress driven by active NGOs. Anti-migrant populist discourse rising
With the adoption of the law on the conflict of interest and the eventual amendment of the law on party financing after years of haggling, the Czech Republic has made some progress in fighting corruption, and defending media pluralism and independence. The watchdog NGO alliance, Reconstructing the State, played a major role in the adoption of these changes. NGOs also accomplished important successes in areas such as city planning, LGBT rights, food safety and participatory budgeting on the local level. At the same time, the quality of democracy has suffered from a growing populist discourse on migrants, Islam and the European Union. While the number of refugees remained small, mainstream politicians, including President Zeman and Deputy Prime Minister Babiš, as well as the right-wing extremist camp aroused strong fears of the threat to national security, values and identity posed by migrants, Islamization and a unified Europe. Amplified by the media, this discourse undermined any discussion about the international responsibility of the country. The period under review was generally characterized by weakening social consensus, with the president playing an increasingly divisive and populist role.
Strong economy despite slower growth
While economic growth slowed, the Czech economy remained strong in 2016. Unemployment was the lowest in the European Union, and for the first time since 1994, despite plans for a deficit, the Czech Republic ran a fiscal surplus. The Sobotka government continued the expansion of public R&D spending and initiated - but failed to implement - far-reaching education reforms. Progress on Europe 2020 was evaluated as mostly positive by the European Commission. However, most of these policies are funded by EU structural funds and the sustainability of their funding beyond 2020, when the EU funding will end, is questionable. In the case of infrastructure, the available financial resources are not used to the fullest potential, due to serious administrative delays and problems with the environmental impact assessment process. The situation of low-skilled workers, minorities and women on the labor market remains problematic, regional differences in employment remain significant, and shortages of skilled labor are a barrier to the growth of high-tech activities.
Little coalition cooperation across party lines
Policymaking was complicated by the tensions within the governing coalition. The institutional arrangements of government were left unchanged in the period under review. There is very little interministerial cooperation, especially across party lines. The Czech parliament has the means to exercise substantial control over the government. It has a separate audit office that monitors public bodies and has the power to monitor the implementation of its recommendations as well. An ombudsman investigates complaints against public offices, but has no powers beyond making its findings public. The internal structures of the main political parties allow for both the election of leaders and members, but internal debate is limited.
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