Czech budget controversy

The controversy that erupted after the Social Democratic (CSSD) government announced it will submit to the parliament a deficit budget is interesting for several reasons. The media and opposition politicians have questioned mainly the structure of the budget and the size of the proposed budget deficit (some 25 billion crowns). But the more interesting aspect of the budget discussion is the way in which the CSSD's proposal has tested relations between the CSSD and Vaclav Klaus's Civic Democratic Party (ODS).

In July, the CSSD and the ODS signed the so-called opposition agreement, under which the ODS promised not to initiate a vote of confidence in the CSSD government. In fact, the ODS went as far as promising to mar the other parties' attempts to initiate a vote of confidence. Both the ODS and the CSSD also agreed to work together on changing the constitution and the electoral law. In exchange for tolerating the minority CSSD government, the ODS was able to claim some important posts, such as that of the chairman of the parliament's lower chamber.

Analysts have assumed that the signing of the opposition agreement was a master stroke of Vaclav Klaus. In their opinion, he, as the leader of the second strongest party, could cancel the agreement at any moment and bring the CSSD government down. In fact, it seems that it was not Klaus who set a trap for the CSSD but, rather, that it was the CSSD that set a trap for the ODS.

The debate surrounding the budget is a good example of the difficult situation in which the ODS finds itself after signing the opposition agreement. The ODS declared that it will vote against a deficit budget. In fact, the party wants to propose a constitutional amendment under which governments could propose only balanced budgets. The CSSD responded by announcing it may link its budget proposal with a vote of confidence.

Although CSSD leaders are now saying that they will not link the budget with a vote of confidence, the initial suggestions of some CSSD leaders that the CSSD might do so have put the ODS in a very difficult position. Should the CSSD link the budget with a vote of confidence, the ODS would have to choose whether it will vote against the budget, and thus will bring down not only the CSSD government but also the opposition agreement (which would mean losing all the important posts is gained under the agreement), or whether it will adhere to the opposition agreement.

Before the elections the ODS had warned against the so-called socialist practices that a CSSD government could introduce. Warning against a leftist danger, Klaus even called for "mobilization." After the ODS concluded the opposition agreement with the CSSD, many ODS voters felt betrayed. At the same time, many of them have remained faithful to the ODS, as Klaus has kept them assuring them that his party had concluded the opposition agreement for the sake of the country's stability but in the future will behave as a real opposition party.

The CSSD threat to link the budget vote with a vote of confidence have thus, understandably, caused alarm in the ranks of the ODS. Klaus has said that such a move would threaten the opposition agreement. In fact, the ODS does not have much space to maneuver. Should the opposition agreement collapse, the ODS, as the second strongest party, would be asked to form a government. At this point, however, the ODS has virtually no coalition partners. The ODS's efforts to use the agreement with the biggest leftist party to do away with the two smaller parliamentary right-of-center parties (the Christian Democrats and the Union of Freedom) have upset the the two parties to the extent that a future alliance with Klaus is almost impossible.

The collapse of the opposition agreement would almost certainly not result in an ODS-led government. The probability that the CSSD would manage to form a coalition government is much bigger. Therefore, should the CSSD link the budget with a vote of confidence, the ODS would almost certainly prefer to tolerate a budget deficit proposed by the CSSD than vote against the CSSD budget proposal and thus destroy the opposition agreement. Many of its voters would not take lightly such an obvious preference for the advantages brought about by the opposition agreement over principles.

The assurances by CSSD leaders that the CSSD in the end will not link the budget with a vote of confidence must have come as a relief to ODS leaders. The question is whether there is no price attached to the CSSD gesture of good will. The CSSD government has announced that it is prepared to accept cuts in its proposed budget during a parliamentary debate. Should such cuts be made, in particular ostensibly at the suggestion of ODS deputies, the ODS may in the end announce it is prepared to tolerate such a modified budget.

Reuters - 23. 9. 1998