## Thursday, August 08, 2013

### Some hysteria about Czech politics in the media

The Czech media hype some articles, especially in the German-speaking media such as Die Presse, as evidence that everyone thinks that we have become a banana republic. The president has become a king, we're becoming a Putin-style democracy, and so on. A new Bloomberg article talks about a paralysis and other dramatic words.

I just don't understand what they're talking about. What happened?

Recall that in June, plasma physicist Petr Nečas' center-right government was forced to resign after a bizarre police raid against various powerful people who were linked to the (then) prime minister's secretary and sweetheart, Ms Jana Nagyová.

The three cases "addressed" on the same day had almost nothing to do with each other and they had totally different degrees of severity and plausibility. One of them was that Ms Nagyová succeeded in ordering some units of the military intelligence to look for discrediting materials about Nečas' ex-wife (they were divorced 2 days ago from now). The second one was an accusation against some rich folks in Prague who may have been linked to politics and may have bribed someone or befriend someone but why they think that something serious has happened and what it was remains unknown. Third, three rebel deputies of the center-right party who allowed the government to survive in late 2012 – even though the government insisted that its fate was linked to a non-right-wing plan to increase the value-added tax which the three rebels rightfully disliked – were claimed to be corrupt because they were offered some jobs controlled by Nečas if they leave the Parliament. Ordinary political deals were criminalized.

At any rate, the Nečas government is gone and the constitution says that it's the president who may appoint anyone as the new prime minister.

Mr Miloš Zeman, a self-described leftist who is more right-wing than many right-wingers, was elected the new president and Václav Klaus' successor in early 2013, after a decade he spent in the countryside as a modest pensioner. He has always been a political heavyweight and in some contexts in the 1990s and the following decade, he was almost a full-fledged Klaus counterpart on the left side.

He appointed Mr Rusnok, an ally and an economist who left the social democracy because it was too populist for him a few years ago. He also had clashes with the left-wing party a decade ago when he decided to support Klaus as a candidate for the president instead of the assorted losers, 2nd league politicians, and non-politicians who were officially running as candidates of the social democratic party. Recently, Rusnok was working in some private pension insurance industry.

It was important to realize that the government appointed by the president starts to govern and it is only replaced once another government is named by the president. This is not really a bug of the constitution; I have always believed that this was a deliberate solution to avoid various government-less crises. At any rate, Rusnok's government didn't win the confidence vote yesterday as it only got 93 out of 200 votes – only a few votes were missing. The result was "no" but it wasn't a debacle Rusnok would have to be ashamed of.

Strangely enough, Zeman succeeded in convincing the social democracy (along with the communists and the Public Affairs, the right-wing populist party that used to be the smallest part of the right-wing coalition but it betrayed so that only its smaller leftover, now defunct LIDEM, remained the only member of the center-right coalition) that they should support the government so they did while the fired center-right coalition essentially voted against the government (with the exception of two new rebels; I would probably be a rebel as well if I were an ODS deputy these days). This polarization is already a bit illogical and shows that Zeman celebrates successes in overtaking the social democratic party he lost a decade ago. Mr Sobotka, an annoying leftist and the current chairman, planned not to support the technocratic government but Zeman and his allies in the party ultimately won. As far as I can say, it's a great news if the social democratic party is returning from the obnoxious true i.e. hateful leftists to more sensible and pragmatic folks close to Zeman. I surely prefer a social democratic whose election doesn't look like a catastrophe to me – Zeman's ČSSD obeys this condition while Sobotka's ČSSD may not.

At any rate, Rusnok's government will govern despite the lack of confidence because this is what the constitution says. The president is expected to search for a "new attempt" after such a no-confidence vote but there's really no constitutionally enforced deadline so he can keep Rusnok in his job for months or a year and at least so far, it could be good if he were there until the regular 2014 elections. (The early elections may arrive as early as October 2013, too. It would sound a bit scary to me.) It would help the right-wing parties to score better in the elections, too, because every government is unpopular and Rusnok's government would undoubtedly be marketed as a left-wing one even if it were not. ;-) And yes, there exist aspects in which I prefer weak centrist governments even over right-wing ones because they screw even less things than the nominally right-wing governments – the less government, the better.

None of these developments should have been unexpected. For years, people like Klaus (or myself) would say that the direct presidential elections don't mean any "increase of democracy". It mainly means that some political power groups (including the media – that were not too successful in this case, thank God) decide about the result of such elections and the resulting president will feel much stronger than the presidents chosen by the Parliament.

I think that it wasn't a great idea to switch to presidential elections. But I don't think it was such a catastrophe, either – at least given the fact that Zeman was the winner at the end. So needless to say, I immediately adapted to the direct presidential system. It gives more power to the president. He feels more self-confident. But if he's better than other political forces, it may be a better setup. Every sensible system of rules may work. I used to care whether majority or proportional systems were better, and so on, but I tend to think that these obsessions were childish. It doesn't really matter in average.

The hysteria about the new arrangement is incomprehensible to me. For example, someone says that we're switching to a Putin-like system. Maybe. But we're also getting closer to the American or French presidential systems. Obama was also directly elected, is powerful, and is often able to deal with the Congress as if he were equally strong or stronger. It's interesting that the critics of the current setup never mention the American analogy.

Czech Paralysis Extends as President Zeman Seizes Spotlight.
You know, having a technocratic government in resignation isn't supposed to be – and isn't - paralysis. It's business as (almost) usual. There is a government. It enjoys some political support because it was appointed by the president who was elected by the people. This government is doing some usual work (they promise not to do too radical things). And a government that would also enjoy the support of the Parliament is being looked for, at an undefined timescale. Hysterical words such as "paralysis" are totally inappropriate. If the authors of the constitution thought that a no-confidence vote for the government automatically implies a paralysis, they would make sure that this doesn't happen. ;-)

So the direct presidential elections have surely made the president more powerful, just like some of us were predicting, but this doesn't imply any catastrophe.

The first paragraph of the Bloomberg article says:
The Czech Republic’s political deadlock was extended yesterday as President Milos Zeman’s defiance of lawmakers threatens to hamper the country’s ability to tackle its longest economic slump on record.
This is complete bullshit. Virtually no politicians – or journalists – are talking about an "economic slump". We have just gone through some quarters in which the growth was around minus one percent. There's no law of physics saying that the growth has to be positive every year. It's just not, OK? The economy sometimes goes down for a while, too. And it's not always the government's fault much like the growth of the economy isn't always the government's success. You ate or drank too much last night, got bills to pay. So today, your head just feels in pain, you miss Ed dhe bus, and your productivity and consumption goes down. It sometimes happens and it has nothing to do with the government's recent actions.

It's just completely irrational to get obsessed about two or three quarters with a negative growth of order one percent (annualized) if not smaller, something that no one can really detect. The negative growth reflects the reality in the world economy – we're heavily connected to the global economy – at least that's the impression I am getting. It's great that no one in the Czech Republic is getting obsessed about fractions of a percent of the GDP numbers. And it's great that no politicians are obsessed about it, either.

Some nations' politicians will do anything to make these GDP numbers positive. In most cases, this obsession resembles a 40-year-old lady who will buy an arbitrarily expensive make-up to boast skin that looks like the skin of a 15-year-old girl. It's just stupid. It's a denial of reality and whoever doesn't see that it's just a stupid game is being had. And if this growth is just being bought for the increased public debt i.e. by increasing the deficit, it's even more stupid than in the lady's purchase of the makeup. One should really talk about the GDP minus the budget deficit so that these ways to mask negative growth by buying makeup and piling debt would be discouraged because they would be rendered futile.

The growth will undoubtedly return to the Czech economy but I think it's a sign of communist thinking if someone assumes that the timing of this revived growth primarily depends on the top politicians' decisions. I am happy that most Czech commentators and politicians share this viewpoint of mine – most of the growth issues are due to internal dynamics in the economy, not due to some political puppets. Politicians may quickly influence the makeup-like numbers on the surface only (including funny games to move a billion from one coffer to another), not the real state of the economy. Yes, Czech politicians and media talk much more frequently about the goal to reduce and keep the budget deficit below 3% of the GDP – very likely to be the case in this year – than about the hysterical "slumps in the economy".

The showdown with lawmakers came to a head when technocrat Prime Minister Jiri Rusnok lost a confidence vote. His nomination by Zeman in June without parliamentary backing was an unprecedented snub to parties.
Well, it's not the first time when a government lost a confidence vote. So it's wrong to say that this main outcome is unprecedented. In this case, Zeman could have expected that the Rusnok government wouldn't win the confidence vote. But it was a speculation because the results of votes are never quite known in advance. So there's nothing unprecedented about this issue, either.
The country may now face a snap vote as its increasingly fractured politics remain in crisis.
I would like to know how the bit whether "politics is in crisis" was quantified. Where does this claim come from? What is it supported by? What I see is lots of people who have no idea about the art of politics and who are emitting similar negative statements about the Czech democracy – and other democracies. What I am seeing isn't any politics in crisis. It's business as usual that follows the basic rules described by the constitution. In democracy – or other parts of the real world society, for that matter – it's just not determined in advance what will happen with a government, a parliament, a political program, or other things. It depends on the dynamics of the politics and the ability of the politicians (professional representatives of various groups' interests, philosophies, and values) to pick the right "moves" that will allow them to win certain political battles. In my opinion, people who hate this very dynamical face of the democratic politics are fascists. They are waiting for a new Hitler who will make the world simple, predictable, and not at all "fractured" again. Thank you, I just don't want that. I want politics to be allowed to be fractured. I want politicians to be able to achieve unexpected outcomes as long as the law is respected in the process. I want the deputies to have a de facto and de iure right to disagree with the majority of their partisan clubs – if they were just homogenized screws doing the same thing that a leader orders, they wouldn't have to be there at all. Counting them in advance would be enough.

The Czech government was borrowing the local currency for 1.48% in June and 2.25% today, below the yields of the U.S. treasuries, and the Czech economy remains at the highest GDP-per-capita level except for a slightly stronger Slovenia among the post-socialist countries so I think that these numbers suggest that the markets don't think that some catastrophe is being prepared. The Czech koruna has been stable for years (after many years of fast appreciation) and strengthened by 0.5% or so today, too. But these are not the events and numbers that the Bloomberg writers would care about.

1. During the last Czech presidential election I "liked" both Karel Schwarzenberg and Milos Zeman on Facebook. Now I am getting updates on the current situation from both of them. Of course they are in Czech so I can only guess what they say, but at least it's pretty clear that Zeman thinks everything is just great while Schwarzenberg is beginning to sound a bit alarming...

2. For me, direct presidential elections by people definitely mean an increase in democracy. I didn't want Zeman for president, but I respect the elections. It was the will of the nation. He has much more legitimacy than Klaus ever had. Klaus's presidential election was a mess and a disgrace. He was elected in the 6th round and by means of bought votes, bribery and corruption. (the prize of one vote for Klaus was about 2 milions CZK). I did not consider him to be a legitimate president.
I have no idea how you can be so blind and not see how corrupt Klaus actually was and what a disaster on a moral and economic level for the Czech republic he was