Czech cabinet crisis left to fester as president heads to China

Czech cabinet crisis left to fester as president heads to China
It has become ever more obvious that President Milos Zeman and billionaire Finance Minister Andrej Babis are acting in unison.
By bne IntelliNews May 8, 2017

The Czech cabinet crisis has been put on hold  – at least in public – until President Milos Zeman returns from his visit to China on May 18. However, it has become ever more obvious that the president and billionaire Finance Minister Andrej Babis are acting in unison to try to overthrow Prime Minister Bohuslav Sobotka.

Sobotka withrew his offered intention to resign on May 5 after it became clear that Zeman would interpret his move as just his own resignation, rather than the whole cabinet, which has been the consitutional precedent. This would have meant the coalition government could have continued but under a different premier, and with Babis still in place as finance minister.

The premier then asked instead for the president to fire Babis, something Zeman refused to do on May 8, claiming that this would violate the coalition agreement between the two leading parties in the government. 

Sobotka's Social Democrats and Babis' "centrist populist" Ano party have ruled via an ill-tempered coalition since early 2014 but the jockeying has become more intense recently as the billionaire's party opened up a 10-point lead over the premier's party ahead of the elections in October. 

Sobotka said on May 2 that he would quit, blaming persistent questions over Babis’ financial operations, largely connected to a bond issue by the finance minister’s Agrofert corporation. The move appears to have been intended to remove Babis from the cabinet and the key position of finance minister.

However, the PM was blindsided by President Milos Zeman on May 4, who said he would accept Sobotka’s resignation, but keep the government – including Babis – in place. That was a move clearly designed to spark jockeying within the CSSD by setting up a contest to succeed Sobotka. The president maintains strong support within the party, which he led as PM in the 1990s, and he has long sought to undermine Sobotka, who he blames for his failure to be elected president in 2003.  Babis has also indicated so far that he will not put forward an official candidate from his Ano party against Zeman when the president faces re-election early next year.

At risk of being pushed aside at both national and party level, Sobotka performed a U-turn on May 5. The prime minister said his decision to resign and bring down the government had been thwarted by the head of state and no longer makes sense. He must, he insisted, push Babis out of office, because the accusations of financial impropriety mean the Ano leader’s presence in the government damage the country’s political ethics.

“I have decided instead to propose the dismissal of Finance Minister Andrej Babis and hope that in this case at least the president will act in line with the Czech constitution and recall him from office without further delay,” Sobotka said.

Babis retorted that he will leave his fate in the hands of the president. He has accused the Social Democrats of orchestrating a smear campaign against him. On May 3, tapes were released apparently featuring Babis instructing a journalist at one of the major newspapers he owns to hold sensitive information on rival politicians until closer to the October election.

On May 7, during a live TV interview, the PM accused Zeman of violating the non-partisan stance of the presidency. Should Zeman not accept the sacking of Babis - the head of state must sign off on cabinet changes – Sobotka says he will seek legal and constitutional advice.

Zeman refused to sack Babis and will shortly leave for a long trip to China on May 11 on an official visit, where he will attend the Belt and Road Forum in Beijing on May 14-15. He was due to be accompanied by Foreign Minister Lubomir Zaoralek and Interior Minister Milan Chovanec, who are seen as the prime candidates to replace Sobotka at the head of the CSSD.

The president was due to be accompanied by several oligarchs on his trip to China, as he was on another controversial visit in 2014. Zeman leads an effort to promote Chinese investment in the Czech Republic, pushing Prague to drop any focus on human rights, Taiwan or other potentially controversial subjects. The president is due to meet China’s President Xi Jinping and Russia’s Vladimir Putin over the next 10 days.

 

News

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss