CZECH REPUBLIC: COMMUNIST PARTY ALREADY DE FACTO

C O N F I D E N T I A L SECTION 01 OF 02 PRAGUE 000173 SIPDIS SENSITIVE SIPDIS E.O. 12958: DECL: 02/17/2015 TAGS: PGOV EZ SUBJECT: CZECH REPUBLIC: COMMUNIST PARTY ALREADY DE FACTO JUNIOR PARTNER OF THE RULING SOCIAL DEMOCRATS? Classified By: Acting DCM Mike Dodman for reasons 1.4 b+d ¶1. (SBU) SUMMARY. An increasing number of observers are saying that, for all practical purposes, the governing coalition in the Czech Republic no longer rules. The ruling Social Democrats (CSSD) have turned more often to the opposition Communists (KSCM),rather than their junior coalition partners, the Christian Democrats (KDU-CSL) and Freedom Union (US-DEU),to pass legislation of importance. For the first time, both CSSD and KDU-CSL are now openly acknowledging the effective end of the coalition partnership. This alliance between the Social Democrats and the Communists, who have consistently maintained a slight lead over right-of-center parties in recent polls, provides a preview of what the next government might look like. The main opposition Civic Democrats (ODS) have tried to win support by warning voters that a victory by the Social Democrats in this June,s general elections would lead to a minority government silently supported by the Communists. The Prime Minister has over three months to show that a minority CSSD government, supported chiefly, but not exclusively, by the Communists, is not only not something to fear, but a government that deserves support. ACKNOWLEDGING THE OBVIOUS ¶2. (U) The current Czech government is a three-party coalition of 101 seats in the 200 seat lower chamber. The Social Democrats (CSSD) have 70 seats, the Christian Democrats (KDU-CSL) have 21, and the Freedom Union (US-DEU) have 10. Early last summer during the initial stages of debate on a new, pro-union labor bill, the Christian Democrats publicly turned against CSSD, who then turned instead to the Communists and their 41 seats for support on the bill. Since that time, the Communists have supported the Social Democrats slightly more often than either of the two official coalition partners, particularly on very visible social and economic legislation. An excellent example of this is the same labor bill, which was passed February 8 with near unanimous support from CSSD and KSCM and near unanimous opposition from KDU-CSL, US-DEU, and ODS. On the other hand, CSSD has turned to both ODS and its junior coalition partners to pass other important legislation, including, also on February 8, reform of bankruptcy legislation long advocated 
by the business community, and late last year on deployment of Czech troops in Iraq and elsewhere. 3.(U) At the CSSD program conference, January 28, Jiri Paroubek, the prime minister and the CSSD election leader, said a minority CSSD government is the most likely post-election arrangement. He stated that his government has been successful precisely because it behaved right from the start as if it were a minority government. Paroubek used his speech to say, "Our success in the Chamber of Deputies is given by the fact that the government, under my leadership, has acted right from the start as a minority government.(...) Let us ask ourselves how successful we would have been in passing laws if we had stuck to the 101-strong majority of the ruling coalition when negotiating support across the Chamber of Deputies, or, in other words, if we had remained on the basis of unproductive anti-Communism" (i.e., treating one-fifth of the lower chamber as off limits). 4.(C) On January 29, in a debate against the Prime Minister on one of Czech Television's Sunday afternoon political talk shows, KDU-CSL chief Miroslav Kalousek conceded that the three-party coalition "no longer exists." He warned that Paroubek would have to offer the Communists program concessions and posts in the civil service and state-run enterprises in exchange for their support. (Comment: Kalousek's acknowledgment of reality is in part an element of KDU-CSL's pre-election strategy of highlighting the dangers of bringing the KSCM closer to power. But it also fits with previous KDU-CSL behavior as the small party has previously tried to disassociate itself from coalition partners prior to an election. Having been criticized in the past for abandoning coalitions, and for bringing down the Gross government last year, Kalousek has apparently decided to stick it out within the coalition this time around.) YOU GO YOUR WAY AND I'LL GO MINE ¶5. (C) CSSD parliamentarian Milan Ekert, in a February 2 meeting with the Embassy, also expressed the opinion that the CSSD/KDU-CSL/US-DEU coalition no longer functions. Ekert explained the coalition partners are going in opposite directions. He said, &one train, with CSSD aboard is going this way, and another train with KDU-CSL aboard is going that PRAGUE 00000173 002 OF 002 way. They can not cooperate.8 In a separate meeting on February 8, the Embassy asked Petr Necas, Deputy Chair and shadow Defense Minister for the opposition Civic Democrats (ODS) whether parliament was now ruled by CSSD in conjunction with KSCM. "Absolutely. Without a doubt," was his reply. ¶6. (U) Commentator Bohumil Dolezal, warned in a January 31 editorial, that a CSSD minority government tacitly supported by the Communists would lead to nationalization of health care and restrictions on media independence. The next day, Jiri Pehe, former advisor to Vaclav Havel and now an occasional advisor to Prime Minister Paroubek, wrote a reply in the national daily, Pravo, saying, &Every citizen may expose himself to a simple test. Has he or she been stripped of any of his civic rights as a consequence of the alleged CSSD-KSCM co-governing? Does he or she feel that our democracy is emasculated? Does he or she think that, after the election, Paroubek will start to regulate media, nationalize companies, or introduce a police state? The answer to these questions is easy for most people with common sense: No! Hence, the mobilizers' warnings are in fact advertising future cooperation between the CSSD and the KSCM. If we are already living in emasculated democracy, it is not all that bad, in fact.8 7.(U) The Communist Party also had their program conference January 28. Party Chair Vojtech Filip confirmed that KSCM is ready to support a minority CSSD government. His predecessor, former party chair Miloslav Grebenicek, who had always opposed cooperation with CSSD, failed to attend the conference. The conference's program was drafted by party vice chair, and relative moderate, Jiri Dolejs, who has also expressed a willingness to work with CSSD. ¶8. (SBU) PM Paroubek has said all along that he would never invite the Communists into his cabinet, and almost no one expects the June elections will produce a formal CSSD-KSCM coalition. But most observers have been predicting that the Prime Minister will offer them seats on lower-level state boards, or positions at the level of Deputy Minister, in return for their agreement to support CSSD in a vote of confidence. ODS Deputy Necas also predicted that the Communists would put forward the names of sympathetic non-party members who could be considered among the "experts" that Paroubek intends would fill one-third of the cabinet positions in a minority government. In what is perhaps the first sign of this, on February 2, CSSD and KSCM joined forces to remove two ODS politicians from the Supervisory Board of the Czech Consolidation Agency, the state-run body that bails out failing firms. ODS Deputy Chair and shadow finance minister Vlastimil Tlusty was ousted by a parliamentary vote 94-43. Fifty two of the fifty three CSSD deputies present and thirty seven of the forty KSCM deputies present voted to remove Tlusty. The votes supporting Tlusty came from ODS and KDU-CSL. On February 3, parliament voted to replace the two ODS figures with KSCM parliamentarian Zuzanna Rujbrova and CSSD parliamentarian Miroslav Svoboda. This marks the first time that a Communist has been on the board of supervisors of this agency. ¶9. (C) COMMENT: PM Paroubek continues to impress both supporters and critics alike with his political skills. By freeing himself from the confines of his fragile coalition and bringing the Communists back to the table, he has made himself the strongest and most productive of the three CSSD prime ministers since the 2002 elections. As will be discussed further septel, his record on issues of importance to the United States is generally positive, but with several notable areas of concern on both foreign policy and business climate. ¶10. (C) The CSSD's main contender, ODS, has so far run a rather uninspiring campaign; it will have to come up with more persuasive policies and appealing candidates if it hopes to win enough votes to form a government with the Christian Democrats. The "red menace" strategy that both ODS and KDU-CSL are falling back on isn't working. In fact, if the polls are accurate, unless something quite bad happens, voters are likely to stick with the arrangement that seems to be winning, ushering in a formal CSSD minority government to replace the de facto minority government that exists today. CABANISS