INTERIM GOVERNMENT WITH A WEAK MANDATE TAKES POWER

C O N F I D E N T I A L PRAGUE 000276

SIPDIS

E.O. 12958: DECL: 05/21/2019
TAGS: PGOV PREL ECON EZ
SUBJECT: INTERIM GOVERNMENT WITH A WEAK MANDATE TAKES POWER
IN PRAGUE

REF: PRAGUE 147


1. (C) Summary: On May 8, President Vaclav Klaus appointed
the interim technocratic government of Prime Minister Jan
Fischer, after Prime Minister Topolanek,s government fell in
a vote of no confidence on March 24. The Fischer government
is the result of a compromise among the Civic Democratic
party (ODS),the Social Democratic party (CSSD),and the
Green party (SZ). Fischer,s government, which must seek
parliamentary approval within 30 days of being appointed,
will face a vote of confidence between now and the next
parliamentary session beginning on 5 June. There is,
however, no constitutional time limit on forming a new
government, and thus, even if it should lose the confidence
vote, it is likely to remain in power until the parliamentary
elections planned for October 2009. Fischer and his cabinet
are tasked with managing the day-to-day operations of the
Czech government and will likely be heavily controlled by
CSSD and ODS leadership, which are already campaigning for
the June European Parliament and October national
parliamentary elections. Fischer government ministers will
not have the clout or much time to undertake new policy
initiatives and beyond managing the Czech EU Presidency will
stay internally-focused. End Summary.

Interim Government Sets Limited Goals
--------------


2. (SBU) Fischer has set limited goals for his cabinet of
&non-partisan experts,8 focusing primarily on completing
the Czech EU presidency, preparing the 2010 state budget,
responding to the current economic slowdown, preparing the
country for Parliamentary elections and the unstated goal of
meeting the demands of ODS and CSSD. (Comment: Fischer
butted heads with CSSD leader Paroubek shortly after taking
office when he nominated three ministers without CSSD
approval. He quickly withdrew the nominations, but this
episode demonstrated his lack of political savvy and
disinclination to engage in political battles. End Comment.)
Of the 16 ministers in the new cabinet (not counting
Fischer),CSSD appointed eight, ODS six and the Greens two.
The Christian Democrats (KDU-CSL) chose not to nominate any
ministers, believing that being linked to the government
could hurt their electoral chances this fall. Former KDU-CSL
Regional Development Minister Sobotka told Charge in late
April that because the interim government is de facto
controlled by political parties, his party,s strategy would
be to "take a different line" than ODS and the Greens.


3. (SBU) According to press interviews with Fischer, the new
cabinet plans on taking a hard line on government spending in
an effort to control a spiraling budget deficit that
threatens to exceed 5 percent of GDP. The new cabinet plans
to introduce budget cuts of 10 percent at each ministry,
freeze civil service salaries, lower the indexation of
pensions, and cut health insurance company spending -- cuts
that Fischer claims are necessary to avoid &economic
suicide8 in years to come. Fischer has claimed that budget
cuts and additional revenues will be the &alpha and omega8
of his government. Many of the Fischer cabinet,s proposed
budget cuts, especially cuts to social programs, have already
been met with opposition from CSSD. Other Fischer government
priorities include: finishing the privatization of Czech
Airlines, managing the 2010 foreign deployments bill process
and banning the extremist right-wing Delnicka Strana (Workers
Party). Even if the Fischer government is able to achieve
the difficult and often contentious task of preparing a state
budget, once it leaves office in October it is up to the new
government to accept it or change it to suit its interests.
The Fischer government should complete and present its
government program before the end of May.


4. (C) For electoral reasons, CSSD and ODS have already
tried to disassociate themselves from the &apolitical8
government, and CSSD has already prepared a list of 27
conditions for the new cabinet that must be met to gain CSSD
support for the interim government -- a government, it should
be noted, that the CSSD leadership helped create. ODS has
also threatened that it will not support the government &for
free.8

Key Personalities in the Fischer Cabinet
--------------


5. (C) Prime Minister: Jan Fischer is a lifelong
statistician who sees himself as an expert with no political
ambitions. Regarding his ability to lead during the EU
Presidency, Fischer claims that as Czech Statistical Office
Director he familiarized himself with the European Union and
knows many European Commissioners on a personal level.
Fischer is not interested in being popular, and claims that
his government does not have many goals or ambitions besides

keeping the country on course. Fischer has tried to convince
the media that his government will not be a &puppet
government,8 at the same time stating that he will be
closely consulting with political leaders. According to
press interviews with the new prime minister, he believes
that &he who communicates does not necessarily listen to all
he is being told.8


6. (C) Deputy Prime Minister and Minister of Foreign
Affairs: Jan Kohout, a member of CSSD, was former Foreign
Minister Karel Schwarzenberg,s deputy and was nominated to
join Fischer,s government by CSSD. Kohout became Deputy
Foreign Minister in January 2008 and, in that capacity, acted
in international fora as the Czech Republic,s de facto
Development Minister. A former Ambassador to the EU, the
bulk of his experience is in UN and European affairs. Under
Kohout,s leadership of the MFA, there will likely be a
strong focus on EU relations even as the Czech EU Presidency
winds down and, according to MFA officials, he may favor a
more open approach to improving relations with Russia. Even
though Kohout has extensive diplomatic experience, he does
not have the clout or international government connections of
former FM Schwarzenberg or former DPM Vondra.


7. (C) Minister of European Affairs: Stefan Fule, who was
nominated by CSSD, is a well-respected NATO and security
expert, although he is probably not the best fit for this
position. Fule spent several years as Czech Ambassador to
NATO and at the Ministry of Defense. Many Czech officials
are aware of his interest in returning to the Ministry of
Defense, but as Minister this time around. (A British
diplomatic source told the Charge that Fule initially refused
CSSD leader Paroubek,s offer of Minister of European
Affairs, saying it was not his area of expertise. Paroubek
ignored his repeated refusals and nominated him anyway,
ensuring the public announcement would force Fule into a fait
accompli.) According to MFA officials, Fule eventually
accepted the position of Minister of European Affairs, after
he recognized how few other options were available to him at
the Ministerial level and that this position would allow him
to remain in the limelight and perhaps secure a chance of
becoming the next Minister of Defense. Since he has limited
EU experience, we expect Fule to be only marginally engaged
in Czech EU Presidency business.


8. (C) Deputy Prime Minister and Minister of Defense:
Martin Bartak was the First Deputy Defense Minister in the
Topolanek government and is a mover and shaker at the MOD.
Former Defense Minister Parkanova was politically and
substantively weak, giving Bartak a wide berth to run the
Ministry. Bartak, who fits right into the MOD culture that
has been plagued by a lack of transparency and shady business
deals (reftel),figures prominently in many press reports of
the alleged current procurement irregularities at the MOD.
Bartak will provide continuity in security policy, has many
important ties in ODS and is acceptable to CSSD. He has also
been a strong supporter of U.S. and NATO goals, including
missile defense and Afghanistan.


9. (C) Minister of the Interior: Martin Pecina, the
Chairman of the Czech Antimonopoly Office, was appointed
Interior Minister by CSSD and is generally regarded as an
individual who will do exactly what CSSD Chairman Paroubek
tells him to do. When asked about his primary goal as
Minister, he responded by saying that he got an assignment
from Paroubek to make the Czech police an apolitical entity.
However, in interviews with the Czech press, Pecina has
hinted that he would like to use this post as a springboard
to another prestigious posting, suggesting that he will
likely avoid controversial issues, leaving these issues to
his deputies. Pecina has said he has made it a priority to
ban the right-wing extremist Delnicka Strana (Workers Party).


10. (C) Minister of Finance: Eduard Janota is an experienced
bureaucrat, a long-time deputy finance minister and expert in
the state budget. Janota has worked at the Finance Ministry
for 30 years and has stated that he plans to leave the civil
service when the Fischer government leaves office in October.
Janota has led the State Budget Section since 1992 and,
according to political commentators, &he knows how to
save.8 Janota was nominated by ODS when CSSD refused to
allow former Finance Minister Miroslav Kalousek to stay in
his post. Janota initially refused to accept his nomination,
hoping CSSD would change their position on Kalousek. Janota
eventually accepted the offer after being personally asked by
Kalousek.


11. (C) Minister of Industry and Trade: Vladimir Tosovsky
(no relation to former PM Josef Tosovsky),was nominated by
CSSD and has spent his entire career in the energy field,
including stints at the semi-state electricity firm CEZ and
as General Director and Chairman of the Board of the state

Czech Electricity Transmission System (CEPS). CSSD is
reportedly grooming Tosovsky to replace Martin Roman as CEO
of CEZ once CSSD returns to power. Unlike former Minister
Martin Riman, who spoke no Western European languages,
Tosovsky speaks both English and German, and appears more
comfortable than Riman being on the international stage.
Sources in the Ministry report that Tosovsky is already
taking a much more hands-on approach than his predecessor,
who concentrated mainly on industrial issues, leaving trade
to the deputy ministers.


12. (C) Minister of the Environment: Ladislav Miko,
nominated by the Green Party, was born in present-day
Slovakia and is the founder of the Green Party in Slovakia.
A former Deputy Minister of the Czech Environment Ministry,
he is regarded as close to Czech Green Party Chair and former
Environment Minister Martin Bursik, and is expected to
continue Burisk,s policies. Miko has excellent contacts in
Brussels, having worked in DG Environment at the European
Commission since 2005 as the Director of the Natural
Resources Protection Department. CSSD Chair Jiri Paroubek
had sought to block Miko,s nomination, arguing he was
unqualified, and criticized his efforts as Deputy Minister to
block the construction of the Prague ring road on
environmental grounds. Prior to the breakup of
Czechoslovakia, Miko worked for 18 years at the Slovak
Academy of Sciences. Miko holds a PhD from Charles
University in Prague in systemic zoology and ecology.

Expect Limited Achievements
--------------


13. (C) Comment: The interim government,s links to CSSD
and ODS, and its lack of a political mandate, suggest that
the interim government will live up (or down) to expectations
of limited goals and achievements in the run-up to October
general elections. However, the Czechs may return to being
more vocal and pressing their national viewpoints on issues
like democracy promotion and biotech once they are no longer
constrained by the neutrality of their position as EU
President. Although missile defense legislation will stay on
hold throughout the Fischer government, the MFA will continue
to follow the U.S. missile defense policy review very
closely. Fischer has indicated that managing the 2010
foreign deployments bill process is one of his government,s
priorities, but it is unlikely that the cabinet will be able
to pass the bill in June before the parliament goes on summer
recess, and politicians may be unwilling to vote on this
politically sensitive issue in September -- directly before
October parliamentary elections. End Comment.



14. (U) The full composition of the new government follows
below:

Prime Minister: Jan Fischer (appointed by agreement between
ODS, CSSD, SZ)
Deputy Prime Minister and Minister of Foreign Affairs: Jan
Kohout (appointed by CSSD)
Deputy Prime Minister and Minister of Defense: Martin Bartak
(appointed by ODS)
Minister for European Affairs: Stefan Fule (appointed by
CSSD)
Minister of the Interior: Martin Pecina (appointed by CSSD)
Minister of Finance: Eduard Janota (appointed by ODS)
Minister of Labor and Social Affairs: Petr Simerka
(appointed by CSSD)
Minister for Regional Development: Rostislav Vondruska
(appointed by CSSD)
Minister of Justice: Daniela Kovarova (appointed by ODS)
Minister of Culture: Vaclav Riedlbauch (appointed by CSSD)
Minister of Health: Dana Juraskova (appointed by ODS)
Minister of Industry and Trade: Vladimir Tosovsky (appointed
by CSSD)
Minister of the Environment: Ladislav Miko (appointed by SZ)
Minister of Transportation: Gustav Slamecka (appointed by
ODS)
Minister of Education: Miroslava Kopicova (appointed by ODS)
Minister of Agriculture: Jakub Sebesta (appointed by CSSD)
Minister for Human Rights: Michael Kocab (appointed by SZ)
Thompson-Jones