Milos Zeman, a former prime minister and one-time leader of the left-leaning Czech Social Democratic Party (CSSD), won the country’s first-ever direct presidential election. Zeman defeated Karel Schwarzenberg, the foreign minister in the current center-right government and the candidate of TOP 09, in a second-round contest held in late January.

Zeman began creating waves immediately following his election, declaring that his victory was a vote of no-confidence in Prime Minister Petr Necas’ center-right government, and that an early parliamentary election should be held as soon as possible.

Government leaders have dismissed Zeman’s call for an early election as political grandstanding, and Necas has stated that his administration will remain in power as long as it able to do so. In that regard, disagreement among the coalition partners over an alternative to the rejected EU fiscal treaty represents a potentially insurmountable obstacle to the ODS-led government’s survival for a full term.

Recent polls suggest that the CSSD could win more than 80 seats in the event of an early election, while the KSCM would increase its seat total to 33 and Zeman’s SPOZ would enter the Parliament with seven seats, creating the basis for a center-left coalition government boasting a comfortable majority.

The Social Democrats favor European integration and eventual adoption of the euro as the national currency.

The CSSD and the KSCM currently govern together in 10 of the country’s regions, but the Social Democrats’ own rules ban an alliance with the Communists at the national level. Immediately following his re-election as CSSD leader at a party congress held in mid-March, Bohuslav Sobotka stated his opposition to lifting the ban, but left open the possibility of forming a minority government that relied on the support of the Communists on confidence issues.

Such an arrangement may be acceptable to the KSCM, whose leverage would enable the Communists to influence the policies of a minority CSSD-led government. However, as the Social Democrats favor European integration and eventual adoption of the euro as the national currency, the impact on policies affecting investment and trade will most likely be a lack of progress on liberalization, rather than a reversal of reforms already in place.

Share

The PRS Group
About The Author The PRS Group
The PRS Group is a leading global provider of political and country risk analysis and forecasts, covering 140 countries. Based on proprietary, quantitative risk models, the firm's clientele includes financial institutions, multilateral agencies, and trans-national firms.




www.prsgroup.com


You don't have permission to view or post comments.

Quick Search

Stock Watch

FREE Impact Analysis

Get an inside perspective and stay on top of the most important issues in today's Global Economic Arena. Subscribe to The Manzella Report's FREE Impact Analysis Newsletter today!