Identifier
Created
Classification
Origin
05PRAGUE242
2005-02-18 06:51:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Prague
Cable title:  

CZECH PM GROSS APPEARS LIKELY TO RETAIN HIS

Tags:  PGOV EZ 
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UNCLAS PRAGUE 000242 

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PGOV EZ
SUBJECT: CZECH PM GROSS APPEARS LIKELY TO RETAIN HIS
POSITION

Ref: Prague 232

(U) Sensitive but Unclassified - not for Internet
distribution.

UNCLAS PRAGUE 000242

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PGOV EZ
SUBJECT: CZECH PM GROSS APPEARS LIKELY TO RETAIN HIS
POSITION

Ref: Prague 232

(U) Sensitive but Unclassified - not for Internet
distribution.


1. (U) Summary: The crisis which until yesterday seemed to
be threatening the unity of the current Czech government
coalition (reftel) increasingly looks like just another
episode in the uneasy coexistence of the Social Democrats
and Christian Democrats. The governing coalition, with its
one-vote majority, looks set to stay in place for the time
being, as there is no real interest among the main actors on
the political scene to bring it down. This includes Miroslav
Kalousek, chairman of the Christian Democrats and the
initiator of the latest attack on PM Gross. The Christian
Democrats have softened their demands and seem to be
satisfied by Gross's promise that his wife will cease all
her business activities. END SUMMARY


2. (U) This week has seen a series of reports on Christian
Democrat Chairman Kalousek, beginning just after PM Gross
left for a three day visit to France. The reports started
dramatically, with Kalousek threatening to pull his party
out of the governing coalition. On February 15, Kalousek
issued a statement calling for an extraordinary meeting of
the leadership of the coalition parties and a follow-up
negotiation which would also include the opposition ODS.
Many expected that he would call on PM Gross to resign
(reftel). However, late on February 16, Kalousek appeared
to back down, saying that he only meant to say that he would
support the Prime Minister's Social Democrats if they were
to decide to replace Gross.


3. (U) In addition to Kalousek, the Christian Democrat
leadership published a statement on February 16, calling for
the Social Democrats to solve the current crisis by
replacing Gross. On February 17, Gross called on the three
Christian Democrats serving in his cabinet (Foreign Minister
Cyril Svoboda, Transport Minister Milan Simonovsky and
Environment Minister Libor Ambrozek) to tell him personally,
within the next 24 hours, whether they still want him to
resign. Since the party chair has already backed down, it
is assumed these three cabinet members will as well, and
that will be the end of the talk about no-confidence votes,
at least until the next crisis.

4. (U) Both the main actors in the latest drama, Gross and
Kalousek, are likely to claim victory in this stand-off.
Gross has been able to maintain his position by merely
stating that his wife would temporarily suspend her business
activities. Kalousek can argue that while contributing to
the stability of the government and the reputation of the
Czech Republic abroad, he forced the PM to concede on a
point important to his constituents. Both politicians have
proved in the past to be very skilled in selling their own
version of events to the media.


5. (U) While the government will stay in place for now,
internal divisions and crises within the government are not
to be ruled out in the future. In addition to the natural
differences on various economic and social issues, there
will be increased tensions as we get closer to parliamentary
elections scheduled for June 2006. Many observers believe
that the Christian Democrats will sooner or later walk out
of the coalition to improve their image before the elections
and to distance themselves from the Social Democrats, who
have been plagued by scandals and ineffective governance.
However, for the time being, it appears that the Christian
Democrats feel they are better off inside the government
than outside.


6. (SBU) Comment: Events could well take another turn in
the coming days, but for now it appears likely that Gross
will keep his position. Gross's survival is definitely good
news for his party. Most party members are relieved that
they will not have to look painfully for a new candidate for
the post of party chairman at the party congress next month.
However, this is not good news Czechs who are concerned
about the scale of corruption or conflict of interest in
Czech politics. A prime minister with murky financial
transactions looks set to stay in his position. And the
heat from the latest scandals appears to be dissipating so
quickly that there seems to be no compulsion or sense of
urgency to strengthen requirements on disclosure of personal
assets, including family members. The coalition parties and
the opposition are very critical of each other's ethics, but
are very reluctant to take any steps that would force them
to reveal sources of income, positions on company boards, or
assets held. Most Czechs, being both pessimists and
realists, generally expect a quick return to status quo ante
and are already complaining that an opportunity to cleanse
their political system has been wasted.