Checking the populist tide--for now

[Celerity]

Can the Czech Republic keep bucking the populist trend in central Europe affecting Poland, Slovakia and Hungary?

https://www.socialeurope.eu/checking-the-populist-tide-for-now


Good Europeans: the prime minister of Iceland, Katrin Jakobsdottir, is welcomed by her Czech counterpart, Petr Fiala, to the meeting of the European Political Community in Prague last October during the Czech EU presidency

The Czech Republic has twice thwarted populists’ rise to power. In autumn 2021 extremist forces were defeated in a general election, after which a centre-right government was formed, led by the Civic Democratic Party (ODS). Composed of five not entirely homogeneous parties, it remains united and has a stable majority in the Chamber of Deputies. And on March 9th this year, a new president, Petr Pavel, a retired army general, was inaugurated, having defeated the populist Andrej Babiš in January’s election.

The Czech government made a good job of its stint as president of the Council of the European Union in the latter half of 2022. Well regarded at home and abroad, this managed to address the energy shortage and the cost-of-living crisis, support Ukraine and find agreement on Hungary’s erosion of the rule of law. It also pushed forward legislation, especially on climate, including sealing a difficult agreement on revision of the EU Emissions Trading Scheme.

Not all rosy

Yet not all in the Czech Republic is rosy. Though Babiš failed in his presidential bid, the billionaire ex-prime minister ran a campaign more populist and mendacious than all his previous outings—and his support climbed significantly. He attracted 2.4 million votes in the second round, out of a total of 5.7 million. Many are concerned about the economic situation and the financial outlook. High inflation—in January the annual rate was 17.5 per cent—is disproportionately hitting low-income households and could fuel social discontent. Sociological research suggests Czech citizens view the future with apprehension and uncertainty, fear and fatigue.

Adding fuel to the fire, the government plans to embark on tax and pension reforms promised in its January 2022 policy statement, which included meeting the Maastricht criteria on the public finances ‘as soon as possible’ while creating a ‘tax brake’. Implementation had been postponed by the onset of the war in Ukraine and the EU presidency. But the government headed by the liberal-conservative Petr Fiala, sympathetic to this agenda, will not delay any longer. As the 2022 Bertelsmann Transformation Index report for the Czech Republic pointed out, tax cuts in 2020 have already had devastating effects on the health of the public finances. Its experts warned the measures ‘could lead the country into a debt trap’, with a ‘significant decrease in revenue’ for central and regional government. Necessary investments in education and healthcare—both sectors with striking regional disparities—would be imperilled.

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