Checkmate for Babiš’? What are the implications of the Czech parliamentary election results for Ireland and the EU?

Background

The Czech Republic held scheduled legislative elections for the Czech Parliament’s lower house, the Chamber of Deputies (Poslanecká sněmovna Parlamentu České republiky) on 8-9 October 2021. Ahead of the elections, the country was governed by the centre-right ANO and centre-left Czech Social Democratic Party (ČSSD) parties, led respectively by Prime Minister Andrej Babiš, and Interior Minister Jan Hamáček, with  support from the Communist Party. The opposition fall broadly into two distinct blocs, the first being the centre-left Pirate Party and the Mayors and Independents (PirSTAN), and second the conservative SPOLU (“together”) of the economically liberal Civic Democratic Party (ODS), Christian Democratic KDU-ČSL, and centre-right TOP 09. There is also the small far-right pro-direct democracy, Eurosceptic and nationalist Freedom and Direct Democracy (SPD).

At least 101 seats are required for a majority in the 200 seat Chamber of Deputies. The Czech Republic is a multi-party bicameral system and, from Czechoslovakia’s dissolution in 1993 until 2017, was led by centre-left ČSSD and centre-right ODS-led coalitions. However, in the aftermath of the global financial and Eurozone crises, anti-corruption populist challenger parties emerged, principally ANO, Akce nespokojených občanů (Action of Dissastified Citizens), and the Pirates, originally a single-issue party concerned about copyright protection, but now a broad centre-left party.

A change in the Czech government and in its positions on key EU policy issues such as migration, energy or trade could have significant impacts for the Union, and Ireland, particularly ahead of the Czech Presidency of the Council of the EU in late 2022. The Czech Republic is an influential EU country, part of the Visegrád 4 and a fellow-traveller on free trade, economic competitiveness and digital taxation policy with the Dutch-led “Frugals”.

The election could be considered a referendum on Prime Minister Babiš and the government’s handling of the COVID-19 pandemic. It took place in the context of investigations into Babiš’ business affairs, and it is alleged that the outgoing Prime Minister purchased a €19m French chateau through offshore entities and subsidiaries he indirectly owned, according to the Pandora Papers. His ownership of Agrofert, an agrichemical consortium firm, is also under investigation by the European Commission and the European Public Prosecutor’s Office over conflict-of-interest concerns, potential misuse of EU subsidies, and concerns regarding his potentially undue influence over the nominally independent trust funds controlling Agrofert.  As a result, all grants received since 2017 violated conflict-of-interest legislation and a European Commission August 2021 statement noted all future payments in relation to suspected firms would cease, and local authorities would not be reimbursed  for EU-funded regional or social programmes payments unless-and-until reforms were implemented.

During the previous national election, in 2017, members of parliament were elected from 14 multi-seat constituencies via proportional representation open lists. The electoral thresholds were dependent on alliance types, with single parties needing 5%, two-party alliances 10%, three-party alliances 15% and four or more parties needing 20%. In February 2021 however, following a case submitted by the Mayors, KDU-ČSL and TOP 09, the Czech Constitutional Court ruled that the electoral system was disproportional and unduly favoured larger parties, and established an electoral threshold for all alliances of 5%. Voters cast their ballots over a period of two days, due to COVID-19 restrictions, with a turnout of 65.43%, compared to 60% in 2017.

Election Results

Party	No. of Seats - 2021	No. of Seats – 2017	Change Up/Down
ANO 2011	72	78	-6
SPOLU	71	52	+29
PirSTAN	37	28	+9
ČSSD	0	15	-15
Communist Party of Bohemia and Moravia	0	15	-15
SPD	20	22	-2

 

Following the election, the essential divide in Czech politics is seemingly not so much between right or left-wing parties, but between those more economically liberal, cosmopolitan open parties and those favouring more socially and politically exclusionary policies.

Prime Minister Babiš’ ANO party had a disappointing election, coming second with 27.12% of votes, but it still remains the largest party in parliament, with 72 seats, a loss of six compared with 2017. Mr Babiš will likely continue as caretaker prime minister and have the first opportunity to form a coalition.

The election’s broad winners were the two anti-ANO coalitions. The centre-right coalition SPOLU came first in a tight contest with 27.79% of votes, and 71 seats, a gain of 29 compared to 2017. However, this is still one seat less than ANO. The largest party within SPOLU and second largest in parliament, ODS, won 34 seats, just under half those of ANO. The Christian democratic KDU-ČSL gained 13 seats to 23 and the centrist TOP 09 doubled their seats to 14.

The centre-left PirSTAN coalition came third with 15.62% of votes and 37 seats, a gain of nine. However, the result was relatively disappointing compared with their peak polling of almost 30%. While the alliance grew overall, the lion’s share went to the centrist Mayors, who gained 27 seats to reach 33. The Pirates, previously the third-largest party in parliament, became the smaller coalition partner, losing 18 seats and returning just four members of parliament.

The main losers were left-wing parties, both the ČSSD and the Communist Party failed to reach the 5% electoral threshold, losing all their seats, and for the first time since 1920 there will be no communist parliamentary delegates. The departure of the CSSD and Communist parties, key ANO allies, means that the likelihood of ANO forging a coalition is increasingly unlikely given other parties’ explicit refusals to work with them. The far-right SPD also had a disappointing result, down two seats to 20, polling 9.56% compared to 10.64% in 2017, and losing out on a possible kingmaker role.

The next step will be coalition talks, with the single largest party granted the first opportunity to form a coalition. Before the election, President Zeman announced his intention to invite the leader of the most successful party to start talks, rather than the leader of an  electoral coalition   which the President considered a  “hoax”. This statement has probably exacerbated political tensions in the Czech Republic. However, Zeman remains hospitalised following the vote for an undisclosed medical condition. His possible incapacitation may mean that, according to the Czech Constitution, the President of the Chamber of Deputies could instead appoint a Prime Minister-designate instead of the President, possibly denying the incumbent, Mr Babiš, a chance at coalition talks. However, Babiš will likely remain in-situ as caretaker until a new government is formed.

Possible Implications for the EU and Ireland

Based on the results, while they remain the largest party with 72 seats, ANO will be unable to form a majority as the other three political groups have indicated that they will refuse to work with them.  ANO may potentially establish a minority confidence and supply arrangement with the far-right SPD in exchange for a referendum on EU membership, however such a decision would likely be a red-line for the pro-EU ANO. Another option involves splitting individual parties from the SPOLU coalition. If ANO could persuade the centre-right ODS (33 seats) to defect from SPOLU they could form a majority of 105 seats. However, given that SPOLU was explicitly established in opposition to ANO, this is improbable.

While the ultimate government composition is still unknown, the most likely outcome is a SPOLU-led coalition. In this scenario, the coalition would be led by ODS leader Petr Fiala together in a joint “democratic bloc” with PirSTAN with a combined 108 seats. Political differences between the five coalition parties, however, from pro-business low-taxation SPOLU to the more economically progressive PirSTAN, introduces some uncertainty surrounding its stability. The two alliances remain united in their opposition to ANO’s populist illiberal rhetoric and share common liberal democratic values.

In terms of Ireland’s interests, the Czech election will likely have few immediate implications for EU policy, but a more fiscally conservative approach under an SPOLU-led government may limit support for a possible Stability and Growth Pact revisions or EU fiscal reforms. A harder line on immigration policy may reduce room for manoeuvre on the politically contentious New Pact on Migration & Asylum, and more hawkish positions on economic policy could push Prague closer to the “Frugals” led by the Netherlands and Sweden who oppose a common EU budget, common debt and looser economic rules. The exit of Prime Minister Babiš could also improve relations with Brussels and unblock regional and cohesion monies which have been blocked due to concerns over alleged corruption. The Pirates’ considerable electoral losses may mean any future coalition would be considerably more politically centrist, less radical and more economically and fiscally conservative, particularly compared with ANO’s fiscally expansionary policies in response to COVID-19.

EU affairs did not feature prominently during the campaign, but a future ODS-led SPOLU-coalition would mean that the ODS, affiliated with the ECR grouping in the European Parliament, favour lower taxation, lower public expenditure, oppose deeper EU integration or liberalising immigration. They also support expanding nuclear energy as part of the green transition (a position shared across all parties), and they are mildly Eurosceptic, but oppose “Czexit”, could become more influential. There are significant divisions within SPOLU between the ODS and its partners regarding EU rule-of-law concerns.

Regarding foreign policy, an ODS-led SPOLU-coalition support the Czech Republic’s “unequivocal orientation towards the West”, alongside a conscious return to a Václav Havel inspired human-rights approach to foreign policy, and a firm NATO commitment. The departure of left-wing parties positively disposed towards Russia and China will also likely mark a more critical attitude towards them, especially in the context of closer Czech-Taiwan ties, exemplified by vaccine donations, city twinning and trade visits and worsening relations between Prague and Moscow.

While Czech politics may not seem to outwardly change that significantly, a more conservative right-ward shift may lead to a hardening of attitudes on key EU policies like economic reform and migration, as well as support for a more robust approach towards perceived Russian and Chinese aggression. These developments will have considerable consequences for the EU and Ireland’s place in it, particularly as Prague takes over the Presidency of the Council of the EU in July 2022.