Executive Summary

New coalition offers
bold promises
Between July 2018 and December 2021, Czechia was governed by a minority coalition, including Prime Minister Andrej Babiš’s Movement of Dissatisfied Citizens (ANO) and the Social Democrats (ČSSD), and backed by the Communist Party (KSČM) until April 2021. In December 2021, it was replaced by a coalition government including five center-right parties. The new prime minister, Petr Fiala, has promised to create “a smart, modern, effective and economical state, belonging to democratic Europe and defending democratic principles.”
Problems left for new government; poorly prepared vaccination system
The Babiš government confronted two major crises and leaves further problems for the new government to address. The first crisis was the COVID-19 pandemic, which exposed weaknesses in Babiš’s reliance on unchallenged personal power within the coalition government, lack of respect for outside or international expert advice, and a predilection for choosing policies that could win short-term popularity. The initial wave was handled satisfactorily, thanks to a speedy government reaction and a population willing to accept emergency measures. This was followed by misjudgments and boasts that the pandemic in Czechia was over. Partly because of conflicts within the coalition, Babiš failed to create structures to provide independent expert advice and then, ignoring outside advice and seeking to maintain popularity before regional elections, introduced measures too late to prevent a powerful second wave, which overwhelmed the test and trace system. The vaccination system was poorly prepared. By January 2022, only 63% of Czechs were fully vaccinated, while less than 30% had received a third dose. Vaccine hesitancy – due partly to ineffective government communication in the face of misinformation, especially on social media – has contributed to this relatively poor outcome.
Mounting evidence against prime minister
The second major crisis related to evidence of Babiš’s personal corruption. The European Commission judged that his firm had misappropriated EU funds and demanded the return of the funds received since 2017, estimated at €11 million. Meanwhile, the Pandora Papers revealed an apparent attempt by Babiš to evade tax responsibility when buying property in France. Babiš refused to acknowledge wrongdoing or to step aside as prime minister. Indeed, the personal nature of his party makes it difficult to replace him from within. However, he faced massive opposition from the citizen initiative Million Moments for Democracy, which helped to unite political opposition, contributing to his defeat in parliamentary elections.
Institutions remain strong; shifting international ties
The COVID-19 pandemic has not led to any permanent undermining of civil rights and political liberties. The parliamentary opposition remained active and succeeded in keeping the government accountable. A series of court judgments constrained the government, while independent media ensured the information was in the public domain. GDP in 2020 fell by 5.8%, but is expected to return to the pre-pandemic level during 2022. This has led to a higher level of public debt, about 42% of GDP in 2021, although this level is still low by European standards. A further legacy will be higher prices and a squeeze on living standards, particularly for those on lower incomes. Czechia’s international position has also changed slightly. Relations with Russia have worsened since it was exposed that Russian secret agents were responsible for a fatal explosion at an armaments store in 2014, and Czechia has become more active in alliances with Poland and Hungary in pressing its perceived interests within the European Union.
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