Political intrigue ran rife in Prague on May 4 as scandals, accusations and counter claims were rushed out following the surprise resignation by the prime minister two days previously.
The way mud was flying around the Czech capital, it looked as if the various political factions had spent the previous 24 hours gathering their ammunition following Prime Minister Bohuslav Sobotka’s shock announcement on May 2.
Several journalists from Czech daily Mlada Fronta Dnes resigned following the release of audio recordings showing billionaire Finance Minister Andrej Babis pressuring one of their colleagues over content in the paper. Babis’ business dealings and ownership of major media assets has been a consistent point of attack for Sobotka’s left-leaning Czech Social Democratic Party (CSSD).
The PM’s resignation will break a fractious coalition between the CSSD and Babis’ centre-right Ano, which sits 10 points or more ahead in the polls. Sobotka appears to be making a desperate gamble, betting he can throw enough mud at Babis before any election, which for the moment remains scheduled for October.
However, he is not the only player. Against expectations, the PM failed to officially present his resignation to President Milos Zeman at a meeting on May 4, and now says he plans to do so in the middle of the month instead of after the president has returned from a trip to China.
The wily Zeman is thought to be thrashing out a deal with Babis over the best strategy to ensure that the billionaire can lead the next coalition with a strong hand. Ano currently has the support of around 30% of voters, according to polls, and the president needs Babis's support, or at least acquiescence, if he is to guarantee his own re-election early next year. Zeman, a former CSSD premier, has also fought with Sobotka over control of the party for years.
The president blindsided Sobotka at the meeting, announcing on the PM’s arrival that he would accept the premier's resignation – which he has not yet been given – but asking the government to remain in place until he appoints a new prime minister. This could mean that, rather than the finance minister being removed from the government as Sobotka wants, only he himself would go. At a joint press conference that Zeman bounced Sobotka into attending before the meeting, he walked away while the premier was still speaking. Reports say Sobotka was visibly shaken by the meeting.
Playing it straight
Babis has played it straight since Sobotka’s announcement, professing disappointment that one of the most stable Czech governments since the end of communism in 1989 is to wind up early. The country has had six different cabinets in the last decade.
However, the finance minister is also a smooth operator. He did not deny the authenticity of the recordings, but simply announced he would file a criminal complaint over the recorded phone calls. The finance minister claims he has been followed and wiretapped for months as part of an orchestrated slander campaign.
Babis’ ownership of media assets is in line with a trend in recent years that has seen local oligarchs buying up outlets in a clear bid to gain influence. However, the entry of the billionaire owner of the country’s biggest employer Agrofert into government in early 2014 set alarm bells ringing louder. Several prominent editorial staff quit Mafra newspapers when Babis originally bought the holding.
The CSSD teamed up with opposition parties late last year to push through a conflict of interest bill that specifically targeted Babis. That forced him to put his business assets into a trust, but did little to dent his popularity. His approval ratings are second only to the outspoken Zeman amongst Czech politicians.
Sobotka claimed that he had to resign, as he could no longer tolerate Babis’ questionable financial dealings. That is a reference to suspicion that the finance minister used a loophole to evade tax on bonds issued by Agrofert, as well as Babis’ continuing failure to explain how he could afford to buy Agrofert in the first place back in the early 1990s. However, few take the PM at his word, with the move clearly a last-minute gambit to try to lure voters back from Ano to the CSSD.
The leaked recordings appear to be an attempt to reopen the debate over Babis’ business ethics. Ano has campaigned as an anti-establishment party that sought to upturn a corrupt system maintained by traditional parties, including the CSSD, even though it was founded and financed by one of the country’s leading oligarchs who has been involved in some questionable privatisations.
The tapes feature Babis advising his newspaper’s journalist to sit on sensitive information on a number of politicians in order to use it ahead of the scheduled election in October.
Place your bets
There seems little doubt that Babis will lead the next government, whenever the election finally falls, agrees Milan Nic at the German Council on Foreign Relations, “assuming current trends persist”.
Andrius Tursa at Teneo Intelligence says the most likely scenario will be for Ano to team up with the current junior coalition partner Christian Democrats and the opposition rightwing ODS. Another coalition with the CSSD – only this time with Ano in charge and without Sobotka – is the next best bet, he suggests.
There has been significant discussion that the fractious Czech political scene could see the communist KSCM, which sits just behind the CSSD in polls at around 12%, included in a government for the first time. However, that is not likely according to many. “I don’t think we’ve reached such as extreme point,” says Vit Dostal at Czech think-tank AMO. “It would pitch the entire political body against Ano.”