The Czech Republic’s Crisis of Liberal Democracy Escalates

Letna_2019_panorama4mThis text was originally published in Inroads, the Canadian Journal of Opinion. 

 

On June 23 hundreds of thousands of Czechs assembled at one of the iconic places in Prague, Letná plain, to demonstrate against the country’s Prime Minister, Andrej Babiš, and recent personnel changes in his cabinet. With more than 250,000 participants, this was the largest political protest since the Velvet Revolution in 1989. The demonstrators demanded the resignation of both Babiš and Justice Minister Marie Benešová.

This event marked yet another episode in a wider struggle between the defenders of liberal democracy and their populist foes in central and eastern Europe. Readers are most likely aware of developments in Hungary, where the battle for liberal democracy has apparently been lost, and in Poland, where skirmishes continue. But the progressive escalation in the Czech Republic deserves their attention too.

The Extremist Back Door into Government

As I wrote two years ago in Inroads, Prime Minister Babiš is a billionaire of Slovak origin whose Berlusconi-style political party ANO, founded in 2011, won the last Czech legislative election in 2017.1 Babiš owns a large conglomerate, Agrofert, which has extensive agricultural, chemical and energy interests and controls a large share of the Czech media market after having acquired leading newspapers and the most popular radio station.

In the aftermath of the 2017 election, Babiš struggled to build a parliamentary majority. Populist as he was, he did not want to openly collaborate with the two extremist parties in the Czech Chamber of Deputies – the far-right SPD and the Communist KSČM – as that would tarnish his image in western Europe, where many of his businesses operate. But the mainstream parties refused to enter a coalition with ANO given Babiš’s controversial reputation, his previous record of conflict of interest in office as Finance Minister (2013–17) and, in particular, charges he was facing for fraudulent use of European Union subsidies and tax evasion.

In January 2018 Babiš’s position significantly improved when pro-Russian President Miloš Zeman was reelected. Both for electoral purposes (to mobilize Babiš’s supporters) and strategic ones (to get leverage over Babiš), Zeman had promised to give Babiš enough time to form a cabinet. This strategy was predicated on Zeman’s securing a second presidential term, which is what happened.

In June 2018, after protracted negotiations, the Social Democratic Party (ČSSD) agreed to form a minority coalition with ANO (93 of the 200 lower-house seats), tacitly supported by the Communist KSČM (which holds 15 seats). This de facto revived the ruling coalition from the previous legislature, which at that time commanded a majority. This coalition had proved poisonous for the Social Democrats. Back then, ANO capitalized on positive coverage in Babiš’s media and was able to successfully claim credit for strong economic growth and the ČSSD-ANO coalition’s generous welfare policies. While ANO’s vote share sharply increased (from 18.7 per cent in 2013 to 29.6 per cent in 2017), the ČSSD suffered an electoral debacle (falling from 20.5 per cent in 2013 to 7.3 per cent in 2017). Should this trend continue – and there are signs of further decline in the ČSSD’s support – this mainstream left-wing party could possibly fall short of the threshold for representation in the Chamber of Deputies in the next election, a first in the history of the independent Czech Republic. The beneficiary would likely be the populist ANO and possibly even the two extremist parties.

But for those committed to the principles of liberal democracy, the current situation is bad enough. The new role of the KSČM means that, for the first time since 1989, an unreformed Communist party has indirectly gained access to executive power. Moreover, the far-right SPD has become de facto another ally of the governing ANO as, according to some analyses, the SPD deputies have voted with the ANO more often than its coalition partner ČSSD.2 Thanks to their role in supporting the cabinet (or just ANO), the two extremist parties, notorious critics of Western institutions and the European Union, secured senior positions in parliamentary committees and state control bodies, and exercise undue influence over policy. One example is January 2019 legislation, initiated by the KSČM, that taxes the compensation paid to Czech churches for property that was stolen by the Communist dictatorship before 1989.

No wonder then that many Czechs are worried that their country will follow the Hungarian and Polish path toward taming the media. The shadow coalition of ANO, SPD and KSČM may gradually take over the commissions that oversee public television and radio stations through successive appointments by the Chamber of Deputies. So far, public television and radio have provided high-quality independent journalism in a media landscape increasingly dismembered by Czech oligarchs. Recent controversial appointments to the oversight commissions give substance to fears for the future of independent journalism, along with the lack of restraint exercised by Babiš’s own media group and criticism of the public broadcasters by the leadership of the SPD and KSČM.

Babiš’s Scandals and the Attack on the Rule of Law

The criminal charges Babiš faces pose a profound democratic challenge. They inevitably lead to conflicts of interest that could undermine the independence of the justice system and the integrity of the country’s rule of law. This is why so many people came to demonstrate in June.

The catalyst came from revelations about Babiš’s Stork’s Nest resort in southern Bohemia. To receive European Union subsidies for small and medium-sized enterprises, in 2007 Babiš transferred the ownership of the future Stork’s Nest’s site from his conglomerate Agrofert to his children and wife. When the subsidies were exhausted and the resort completed, Babiš reincorporated the Stork’s Nest into Agrofert in 2014.

The public first learned about the case from the media in 2015 and the police began to investigate Babiš, his family and his partners for damaging the financial interests of the European Union, which could result in a prison sentence of up to 10 years. The European Union’s Anti-Fraud Office (OLAF) also investigated the case and, in late 2017, concluded that several national and European laws had been broken. Lacking judicial powers, OLAF sent its conclusions to the Czech authorities carrying on their own investigation. In November 2018, independent journalists broadcast a recording suggesting that Andrej Babiš may have had his son “kidnapped” and taken to Russian-occupied Crimea to avoid his being interrogated by the Czech police over the Stork’s Nest. The broadcast led to small-scale civil society demonstrations and an unsuccessful no-confidence motion in the Chamber of Deputies.

An impetus for renewed protests came in April 2019 when the police finally referred the investigation to the public prosecutor and recommended that the Prime Minister be charged with fraud. The next day, the Minister of Justice, Jan Kněžínek (an independent appointed by ANO) resigned for allegedly unrelated personal reasons. Babiš immediately replaced him with Marie Benešová, an old and controversial ally of President Zeman, a move that raised doubts about the way the Stork’s Nest case would be handled as well as fears for the independence of the judicial system. These developments triggered weekly demonstrations in Prague and, to a lesser extent, other cities across the country.

These protests intensified when the European Commission issued a preliminary report accusing Babiš, in a separate case from the Stork’s Nest, of violating conflict of interest rules. The new charge implied that the Czech Republic would have to reimburse all subsidies Babiš’s companies had received and that Babiš could face yet another criminal investigation. This gave rise to the huge June 23 protest in Prague, but given his power base, the Prime Minister easily survived a parliamentary vote of confidence initiated by the centre-right opposition.

After a summer political hiatus, the supervising public prosecutor, Jaroslav Šaroch, decided in early September to halt the investigation and not refer the Stork’s Nest case to court, abruptly ending four years of intensive police work and ignoring OLAF’s recommendation. Šaroch’s unexpected decision, which looks curious both to legal experts and to the general public, has thus further contributed to fears about the independence of the judiciary, as have the Minister of Justice’s recent plans for a reform of the system of state prosecution. For their part, Babiš, ANO, the ČSSD and most in the illiberal camp have already voiced relief that the case was over. Civil society organizations have scheduled new massive protests in November, in preparation for the verdict by the Supreme Public Prosecutor, who has three months to review the decision of the supervising public prosecutor.

Whatever the outcome of the Stork’s Nest affair, it is increasingly clear that Babiš’s dominant role in Czech politics constitutes a possible threat to the country’s democratic institutions and the rule of law. An economic conflict of interest – Babiš influencing public decisions in favour of his businesses – has gradually given way to a judicial one, where Babiš sits at the apex of the system charged with investigating his alleged wrongdoing. Not only can he replace the Justice Minister, but he could also dismiss the Supreme Public Prosecutor through a vote of his cabinet. It is already clear that he was able to head off any police investigation into the alleged kidnapping of his son and, at least temporarily, into tax evasion accusations related to the Stork’s Nest case.3

The Illiberal Triangle

In their efforts to weaken liberal democratic institutions, the populist ANO and extremist SPD and KSČM can count on the support of President Zeman, forming an illiberal triangle that operates in mutually beneficial symbiosis. Zeman’s illiberal stance and pro-Russian and pro-Chinese foreign policy orientation make him a natural ideological ally of the two extremist parties, which he increasingly openly supports and thus legitimizes. The reciprocal backing of these parties not only helped Zeman’s reelection but also means that Zeman cannot be held responsible for his maverick behaviour as President. When a liberal democratic majority in the Senate (the upper chamber) voted in June to bring charges before the Constitutional Court against the President for violating the constitution, the KSČM and SPD’s votes helped bury this initiative in the Chamber of Deputies.

As another side of the triangle, Zeman can also count on Babiš’s nearly unconditional support. A case in point is the Prime Minister’s refusal to file a constitutional complaint when Zeman clearly went beyond his legal authority and refused to appoint a new Minister of Culture from the ČSSD. Similarly, when Zeman erratically criticized Kosovo’s independence on his recent visit to Serbia, the Prime Minister, acting against the country’s long-term foreign policy, said that his cabinet would consider whether the Czech Republic should revoke its recognition of Kosovo. In return, the Czech President insinuated not only that he would back Babiš as Prime Minister no matter what but also, shockingly, that he would give him a presidential pardon should the Supreme Public Prosecutor reverse the decision in the Stork’s Nest case.

Note that the illiberal triangle is something of an alliance of circumstance. President Zeman, the far-right SPD and the far-left KSČM, from what we know, dream of withdrawing the country from the European Union and NATO and bringing it back into the Russian (or, perhaps, now the Chinese) orbit. With his business interests firmly in the European Union, Babiš is wary of following the others’ foreign policy orientations. Where all three sides of the triangle line up, though, is their desire to weaken key institutions of Czech liberal democracy, in particular the justice system and independent public sector media, which stand in the way of their aspirations. As noted, Babiš’s new Justice Minister’s actions suggest an effort to eliminate the first of these obstacles. As for the second obstacle, Zeman recently talked about stripping the public sector media of their financial independence by scrapping the broadcast receiving licence, which is currently paid by all Czech media consumers.

Such illiberal developments are likely to spark a new wave of massive protests, which could potentially deter Babiš, who remains eager to cultivate a good image in the West. However, he may choose instead to follow the example of Hungary’s Viktor Orbán. A dose of illiberal reforms may cause relatively little tangible damage in Czech-EU relations in areas that matter to him while strengthening his political position at home. The 250,000 who demonstrated on June 23 were mostly liberal voters, who represent a minority in the country. At this point, the favourable economic conjuncture, generous (and, according to critics, irresponsible) redistributive policies and anti-immigration positions keep ANO well above 30 per cent in the polls despite all of Babiš’s scandals.

In the months to come, the crucial question will be the attitude of Babiš’s supporters. If the liberal camp is able to present a positive vision (not solely based on opposition to the incumbent’s populism), some could be won over, especially if Babiš’s pending cases are properly handled by the European institutions as well as the national police and public prosecutors.

Finally, an economic recession, which is considered imminent by some forecasters, would also hurt Babiš. But this could have the perverse effect of playing into the hands of the extreme parties, which would then be in a position to capitalize on any illiberal reforms. Indeed, some fear the emergence of a new far-right party, Trikolóra, around Václav Klaus, Jr., the son of the former populist president. This party has already received backing from pro-Russian disinformation media. Clearly, while this battle over liberal democracy remains largely hidden from international public view, it is gathering momentum, and the stakes are high.

 

 

This text can be referred to as: Kostelka, Filip, 2019, “The Czech Republic’s Crisis of Liberal Democracy Escalates”, Inroads 46, http://inroadsjournal.ca/the-czech-republics-crisis-of-liberal-democracy-escalates/.

 

Notes

1 Filip Kostelka, A Muted Triumph for Czech Populism, Inroads, Winter/Spring 2018

2 See Data ukazují, že ANO má při hlasováních blíže ke komunistům a SPD než ke koaliční ČSSD, Česka televize

3 In 2014, the German tax office found that Agrofert may have evaded taxes by paying large sums of money through its German branch for advertising at the Stork’s Nest resort, saving tens of millions of euros. The Germans transferred the information to the Czech tax office, even though it was under the direct authority of the Czech Minister of Finance of the time – Andrej Babiš. Unsurprisingly, the Czech tax office did not contact the Czech police, which thus did not start the investigation into this tax evasion until 2019, four years later, when it received information from European authorities (including OLAF).

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