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Whither the Czech government?

The package of stabilization measures announced last week by the ruling coalition would make a very good core of a new government's program. As a short-term program of the old government, albeit with two new faces, it will probably fail to generate the kind of credibility this government needs to work productively and survive.

The package itself--a second package of austerity and corrective measures announced by the besieged government in one month--is not a bad document. It is, so far, the most precise--and devastating--diagnosis of problems that the troubled Czech economy has experienced. However--like so many recent actions of Klaus's government--admissions of failures, as well as drastic measures aimed at correcting the problems, came only under extreme pressure. A dramatic decline in the value of the Czech crown made it simply an imperative for the otherwise paralyzed government to act.

A long list of government's failures listed in the document raises serious questions. Most important, ordinary people will ask themselves whether the government realized there were such serious problems only under the pressure of intensifying crisis or whether it had known about most of the problems for a long time but decided to ignore them. The worst possibility in this context, of course, may be that the government had simply been lying to the public.

The chief purpose of the package is to turn the economy around and renew the public's confidence in the government. In this context, the question of whether the proposed measures represent an appropriate cure is as important as the question of whether the government that is attempting to apply such a cure has the necessary credibility. The answer is: "probably not."

Not only had the coalition been unable to agree on radical enough personnel changes that would amount to the admission of political responsibility for the failures; the three coalition leaders once again failed to even say openly that it was the three parties' government that bears primary responsibility for the problems. The language used in the stabilization package is, once again, non-specific when it comes to claiming responsibility: things happened, processes took place, mistakes occurred. And the document contains no apology.

Despite all of such shortcomings, even this government, led by Vaclav Klaus, still has a chance to turn things around. But the stabilization package, and the government, could succeed if the government is able to seek and win a broad social consensus. To do so, it would have to change its style significantly. And the odds are the Klaus government is incapable of doing so. After all, the main problem of the Klaus government in the last year has not been only its lack of leadership and a lack of a long-term vision but its inability to communicate with the public, the opposition, and trade unions.

In order to be able to operate under adverse conditions, which the drastic measures outlined in the stabilization package are likely to create, the government will need to actively seek support form trade unions as well the opposition Social Democrats. It will also need to start explaining its steps to the public, as any large-scale eruption of social unrest can easily mar the whole exercise.

The first signals have been mixed. The mere fact that the normally unapologetic Prime Minister Vaclav Klaus showed the degree of self-reflection and humility that the announcing of the package required is a positive development. However, it was the same prime minister who, only one day after announcing the package, blasted his critics for suggesting he should resign and announced he is going to fight his opponents. Such a war-like vocabulary does not bode well for the fate of the stabilization package.

On the other hand, Klaus's announcement that he will ask the parliament for a vote of confidence as well as his promise, given to President Havel, that the government will in July come up with a long-term vision, are positive developments. Should the government, whose credibility has been severely, undermined, win the parliamentary vote of confidence, it could indeed get a new lease on life--although perhaps only temporarily. More will depend on the actual results of the announced stabilization measures.

Much will also depend on whether the disjointed ruling coalition can act in unity. Should the coalition parties again start spending more energy on fighting each other, rather than pulling in the same direction and projecting decisiveness, the stabilization package is doomed. But even if the coalition succeeds in dealing with such challenges, there is still one big unknown that needs to be answered; namely, whether the public will be willing to give another chance to a government that is now seen as being responsible for causing the current crisis.

Reuters - 2. 6. 1997