CZECH CABINET RESHUFFLE COMPLETED

C O N F I D E N T I A L SECTION 01 OF 02 PRAGUE 000044

SIPDIS

STATE FOR T, EUR/FO, EUR/CE

E.O. 12958: DECL: 01/22/2019
TAGS: PREL PGOV EZ
SUBJECT: CZECH CABINET RESHUFFLE COMPLETED

Classified By: POLEC COUNSELOR CHARLES BLAHA FOR REASONS 1.4 (B) AND (D
).


1. (C) SUMMARY: On January 23, the Czech President swore in
new ministers who will be taking over the health,
transportation, regional development, human rights, and
legislative affairs portfolios. The Prague castle ceremony
completed a protracted and mismanaged cabinet reshuffle,
which began after the Topolanek government suffered stunning
losses in the October senate and regional elections. Perhaps
the most important -- and welcome -- cabinet changes include
the departures of the inept and thoroughly discredited Jiri
Cunek, Deputy Prime Minister and Minister for Regional
Development, and of the Health Minister Tomas Julinek, who
was capable but became a political liability after he pushed
through highly unpopular reforms of the health care system.
The cabinet changes instituted by PM Topolanek are not
expected to lead to any policy course corrections and will
likely do little to reinvigorate the coalition's original
reform agenda. Political and public opposition to reforms,
but also the government's preoccupation with the Czech EU
presidency and response to the economic crisis, will probably
sideline reforms for the remainder of the Topolanek
government's term. END SUMMARY.

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SOME NEW FACES...
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2. (C) Among the first announcements PM Topolanek made
following the October senate and regional elections was a
planned cabinet reshuffle. However, due to the difficulties
within his own Civic Democratic Party (ODS),Topolanek
procrastinated in announcing the cabinet changes. He missed
one self-imposed deadline after another, and made
embarrassing mistakes like announcing a new cabinet position
of a deputy prime minister for economy, without having a
confirmed candidate in mind. When none of those who were
offered the job accepted it, PM Topolanek had to scrap the
DPM proposal and replace it with the National Economic
Council, which is still getting off the ground. Earlier in
January, the tortured cabinet reshuffle attempts came close
to unraveling the Topolanek coalition when they sparked an
internal war in one of the smaller coalition parties, the
Christian Democrats (KDU-CSL). Despite these missteps, PM
Topolanek was eventually able to announce changes in five
ministerial positions. The reshuffle was balanced among each
of the three coalition parties: two ODS ministers, two
KDU-CSL ministers, and one Green minister changed. However,
even with his announcement PM Topolanek managed to do more
damage, since Health Minister Julinek (ODS),for example,
learned of his dismissal from the media and has complained
about this publicly.


3. (C) Jiri Cunek's departure is perhaps the most
significant change in terms of intra-coalition politics.
Cunek, who continues to serve as the KDU-CSL chairman and as
a senator, will retain some influence within the Czech
government, but most observers expect him to be voted out of
office by KDU-CSL at the party's June 2009 congress.
Initially Cunek had no plans to leave the cabinet, and he
could have probably survived had he not lost completely the
support of his own party. The fact that Cunek was also the
target of frequent criticism for his poor leadership of the
Regional Development Ministry helped seal his fate. Cunek's
two positions -- First Deputy Prime Minister and Minister for
Regional Development -- are being taken over by two KDU-CSL
stalwarts: Vlasta Parkanova will continue in her present
role as Defense Minister, but has also assumed the First
Deputy Prime Minister position, which has never been occupied
by a woman before; Cyril Svoboda, Minister for Legislative
Affairs prior to January 23, took over the regional
development portfolio. Both Parkanova and Svoboda have
served in previous governments. Parkanova was Minister of
Justice in the late 1990s, and Svoboda was Minister of
Foreign Affairs and Minister of Interior in the past.
Replacing Svoboda as Minister for Legislative Affairs is
another KDU-CSL politician, Pavel Svoboda (no relation),who
previously served as Deputy Foreign Minister and more
recently as the Czech Permanent Representative to the Council
of Europe.


4. (C) The departure of at least two ODS ministers during the
cabinet reshuffle was widely anticipated, but it was not
clear whether PM Topolanek would be willing to fire 1) his
good friend Ales Rebicek, Minister of Transportation; and 2)
one of the few members of the cabinet who have managed to
push through meaningful reforms, Health Minister Tomas
Julinek. Rebicek, who was generally considered as
ineffective and possibly corrupt, had to go in order to make
room for Petr Bendl, former governor of the Central Bohemian

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region. Bendl's appointment to the cabinet was purely
politically motivated. PM Topolanek had to reward Bendl for
helping him win the ODS chairmanship in December 2008. Note:
Bendl initially supported Topolanek's rival Pavel Bem, but
eventually switched sides and brought to Topolanek valuable
support from the powerful Central Bohemian ODS organization.
End Note. Topolanek also had to do something to assuage the
angry former ODS governors, who were voted en masse out of
office in the October regional elections.


5. (C) The disastrous results of the October senate and
regional elections also forced the departure of Health
Minister Julinek. Julinek, a medical doctor, made the
mistake of taking the coalition's reform rhetoric seriously.
He pushed through reforms of the health care system, and
fatefully for himself, patient co-pays for doctor visits and
medication prescriptions. The health care co-pays became the
top issue for voters in the regional and senate elections,
with the vast majority of voters opposed, making Julinek
politically radioactive. Even though Julinek had significant
support within the ODS, keeping him in the cabinet would have
been counterproductive from the political and public
relations standpoints. With an eye to these factors, PM
Topolanek selected ODS Senator Daniela Filipiova to replace
Julinek. Filipiova is a little known -- and therefore
noncontroversial -- Prague politician and an architect.
Filipiova, who is wheel-chair bound, has worked on the Senate
Health Care Committee since 2000 and has also devoted
attention to issues of concern to the physically disabled.


6. (C) In light of PM Topolanek's decision that the cabinet
reshuffle would involve all three coalition parties, the
Greens had to select one of their four ministers to take the
fall. In the case of the Greens, there really was no other
possible choice but Dzamila Stehlikova, Minister for Human
Rights and Minorities. Removing one of the other three Green
ministers -- DPM and Environment Minister Martin Bursik,
Foreign Minister Karel Schwarzenberg, and Education Minister
Ondrej Liska -- was out of the question. Stehlikova's
performance has been spotty at best, and the November
anti-Roma riots in Litvinov and the government response added
another blot to her record. Her replacement, Michael Kocab,
who is a musician, has a long history of civic activism, but
has little experience with human rights issues per se. Kocab
was active in the Civic Forum and served as an advisor to
President Havel in the 1990s. In October 2008, he ran
unsuccessfully for a Senate seat.

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COMMENT: NEW CABINET BUT LITTLE NEW ENERGY
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7. (C) There is no question that the revamped cabinet was a
must for PM Topolanek after the defeats in the October senate
and regional elections. It is unclear, however, whether this
new cabinet will be more effective and be able to translate
this effectiveness into popularity with the public before the
June 2009 elections to the Europeans Parliament and the 2010
Czech parliamentary elections. Many Czech political
commentators have already buried Topolanek's reform agenda as
"dead," and they are probably correct. It is unlikely that
the government would undertake any significant -- and
probably unpopular -- reforms in light of the October
electoral debacle and 18 months before the next parliamentary
elections. As we are seeing already, the Czech government
will likely remain fully consumed with handling two key
priorities: 1) EU Presidency; and 2) economic crisis
response. Indeed, it may be that these two priorities offer
PM Topolanek and his government a way toward partial
political redemption. If they handle both well, they may be
able to regain some of the political ground they have been
steadily losing over the past two years. Already, we have
seen PM Topolanek's popularity jump in public opinion polls
thanks to his active approach to the Russia-Ukraine gas
crisis. However, successes in leading the EU will be much
less important -- when it comes to winning future elections
-- than a successful handling of the economic crisis, which
is already making itself felt in the Czech Republic. We will
be reporting septel on the Czech response to the financial
and economic crisis.
Thompson-Jones