Czechia

   
 

Executive Summary

Government led by controversial figure
Since July 2018, Czechia has been governed by a minority coalition including Prime Minister Andrej Babiš’s Movement of Dissatisfied Citizens (ANO) and the Social Democrats (ČSSD), backed by the Communists (KSČ). Accusations that Babiš engaged in the fraudulent misuse of EU funds and has perpetuated a conflict of interest by retaining effective control over his business and media interests have continued to polarize political life. The merging of business, media and political power in the hands of the prime minister, as well as the authoritarian inclinations shown by President Miloš Zeman, have triggered protests on larger scale than any seen in the country since the financial crisis. Unlike in the past, when protests were mostly concentrated in Prague and other larger cities, attracting primarily young and educated citizens, the protests organized in 2019 by the Million Moments for Democracy initiative attracted more than 260,000 citizens from around the country to Prague’s Letna Park in June, and more than 300,000 in November 2019 on the eve of the 30th anniversary of the Velvet Revolution.
Economic stability
boosts government
Despite the protests, public support for the prime minister and ANO has remained stable. Babiš has benefited from the country’s economic stability and a number of popular government measures, but has also used his media power to give his government an appearance of efficiency while denigrating opponents. The Social Democrats – losing public support and members, and consumed by internal power struggles – have been unwilling to leave the government.
President holds
significant leverage
However, the dispute over the replacement of Minister of Culture Antonín Staněk laid bare the prime minister’s significant weaknesses vis-à-vis the president and the Communist Party, upon whose support the government depends. As Zeman has remained popular among ANO voters and has good contacts with the Communists, Babiš has refrained from entering into direct conflict with Zeman, who has increasingly transgressed his constitutional competencies.
Growth slowing, but labor market booming
In line with the trend in the euro area, which is the destination for a large share of Czechia’s exports, economic growth slowed in 2019. Unemployment rates remain historically low, and the shortage of skilled labor is the biggest barrier to business investment. Wages have been increasing, though the average level remains substantially behind that of Western Europe, and the government has increased minimum wages and pensions. According to public-opinion polls, a large proportion of citizens are satisfied with their economic situation.
R&D increases have
been unfocused
EU structural funds, the incoming volume of which may be significantly reduced after 2020, have supported a considerable share of recent public investment. The recent increases in R&D investment have led to the creation of new capacities without a clear concept of how their use would be financed, and the R&D conducted has yet to yield results in terms of innovation and technological advances. The country continues to struggle with problems associated with social exclusion, as nearly one-tenth of the adult population faces personal bankruptcy due to the inability to keep up debt repayments. Moreover, while the number of migrant workers has increased significantly without causing much concern, Czech society remains opposed to the integration of refugees.
Alliances with
regional leaders
Internationally, the Babiš government has aligned itself with other East-Central European leaders (especially Poland and Hungary) to push against changes in the allocation of the EU budget for the next funding period (2021 – 2027). The primary issues of contention for the East-Central European countries are the potential decrease in overall funding, increased levels of oversight, and the connection between the rule of law and funding allocations.
Citations:
Bernhard, M., P. Guasti, P., L. Buštíková (2019): Czech protesters are trying to defend democracy, 30 years after the Velvet Revolution. Can they succeed? in: Washington Post, July 16 (https://www.washingtonpost.com/politics/2019/07/16/czech-protesters-are-trying-defend-democracy-years-after-velvet-revolution-can-they-succeed/).
Buštíková, L., P. Guasti (2019): The State as a Firm: Understanding the Autocratic Roots of Technocratic Populism, in: East European Politics and Societies 33(2): 302-330.
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