After election:Czechs to become Europe's reform leaders

Petr Holub
30. 5. 2010 14:14
Center-right "fiscal austerity" coalition have 118 out of 200 seats, can push through their agenda
Petr Nečas, the head of the Civic Democrats
Petr Nečas, the head of the Civic Democrats | Foto: Jan Langer

Prague - Even though the Czech Social Democracy received more votes than any other party in the legislative election, it has only a theoretic chance to form a stable government. The party admits its Pyrrhic victory and its leader Jiří Paroubek resigned yesterday.

This means that the new PM will most likely be from the right-wing Civic Democratic Party (ODS), the arch-nemesis of the Social Democrats that came second in the polls. If we say that the Social Democrats won a battle and lost the war yesterday, for the ODS it goes other way round: in terms of decline of electoral support, they are one of the election's biggest losers. However, if there is a Czech political party that can form a stable government now, it is the ODS.

Its coalition allies will be two new parties in the parliament, whose surprising success is based mostly on protest votes: the conservative and „fiscally responsible" TOP 09 and the Public Affairs party, whose political orientation seems to be center-right with some inclination to populism.

Read more: Czech Socialist leader resigns after winning election

Yes, we can (cut public spending)

What path will the government take? Without doubt, it will focus on fiscal and economic reforms, as the "Greek scare" was the principal topic of the election campaign, and the government will feel confident that voters preferred spending cuts and austerity measures offered by the ODS, TOP 09 and (to a lesser degree) Public Affairs over tax hikes proposed by the Social Democrats and Communists. 

Read more: Greek Flu? Czech bond yields to surge by 0.4 percent

Of course, skeptics would make ironic remarks about Miroslav „Fiscal Responsibility" Kalousek, the TOP 09's "economic savior" who was a Finance Minister in 2007-9 when the Czech Republic went heavily into debt, or about the anti-corruption and pro-transparency Public Affairs, a party sponsored by a shady group of Prague's entrepreneurs and an non-transparent security company.  

Read more: New Czech party says: get ready for tough times

Yet another Central European tiger?

But, nobody is perfect, right? If the parties would at the very least comply with their key campaign declarations and not succumb to major corruption scandals, there is a good chance that the coalition will repeat the success of the Slovakian liberal reforms implemented in 2002-2006 by the Christian Democratic government of Mikuláš Dzurinda.

Dzurinda's Christian Democrats were in power since 1998, but it was only after their second electoral victory in 2002 when they were finally able to find sufficient parliamentary support to push through their radical reforms.  

Czech reformers Petr Nečas (the leader of ODS) and Miroslav Kalousek are in a similar position now - they have a second chance. In 2008, together with PM Miroslav Topolánek they tried to implement a public finances reform, but not succeeded. Now they have a comfortable majority in the Lower Chamber to make their fiscal austerity plans a reality. 


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