US embassy cable - 05PRAGUE242

UNCLAS PRAGUE 000242 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV, EZ 
SUBJECT:  CZECH PM GROSS APPEARS LIKELY TO RETAIN HIS 
POSITION 
 
Ref:  Prague 232 
 
(U) Sensitive but Unclassified - not for Internet 
distribution. 
 
1.  (U) Summary: The crisis which until yesterday seemed to 
be threatening the unity of the current Czech government 
coalition (reftel) increasingly looks like just another 
episode in the uneasy coexistence of the Social Democrats 
and Christian Democrats.  The governing coalition, with its 
one-vote majority, looks set to stay in place for the time 
being, as there is no real interest among the main actors on 
the political scene to bring it down. This includes Miroslav 
Kalousek, chairman of the Christian Democrats and the 
initiator of the latest attack on PM Gross.  The Christian 
Democrats have softened their demands and seem to be 
satisfied by Gross's promise that his wife will cease all 
her business activities.  END SUMMARY 
 
2. (U) This week has seen a series of reports on Christian 
Democrat Chairman Kalousek, beginning just after PM Gross 
left for a three day visit to France.  The reports started 
dramatically, with Kalousek threatening to pull his party 
out of the governing coalition. On February 15, Kalousek 
issued a statement calling for an extraordinary meeting of 
the leadership of the coalition parties and a follow-up 
negotiation which would also include the opposition ODS. 
Many expected that he would call on PM Gross to resign 
(reftel).  However, late on February 16, Kalousek appeared 
to back down, saying that he only meant to say that he would 
support the Prime Minister's Social Democrats if they were 
to decide to replace Gross. 
 
3.  (U) In addition to Kalousek, the Christian Democrat 
leadership published a statement on February 16, calling for 
the Social Democrats to solve the current crisis by 
replacing Gross.  On February 17, Gross called on the three 
Christian Democrats serving in his cabinet (Foreign Minister 
Cyril Svoboda, Transport Minister Milan Simonovsky and 
Environment Minister Libor Ambrozek) to tell him personally, 
within the next 24 hours, whether they still want him to 
resign.  Since the party chair has already backed down, it 
is assumed these three cabinet members will as well, and 
that will be the end of the talk about no-confidence votes, 
at least until the next crisis. 
4.  (U) Both the main actors in the latest drama, Gross and 
Kalousek, are likely to claim victory in this stand-off. 
Gross has been able to maintain his position by merely 
stating that his wife would temporarily suspend her business 
activities.  Kalousek can argue that while contributing to 
the stability of the government and the reputation of the 
Czech Republic abroad, he forced the PM to concede on a 
point important to his constituents. Both politicians have 
proved in the past to be very skilled in selling their own 
version of events to the media. 
 
5.  (U) While the government will stay in place for now, 
internal divisions and crises within the government are not 
to be ruled out in the future. In addition to the natural 
differences on various economic and social issues, there 
will be increased tensions as we get closer to parliamentary 
elections scheduled for June 2006.  Many observers believe 
that the Christian Democrats will sooner or later walk out 
of the coalition to improve their image before the elections 
and to distance themselves from the Social Democrats, who 
have been plagued by scandals and ineffective governance. 
However, for the time being, it appears that the Christian 
Democrats feel they are better off inside the government 
than outside. 
 
6.  (SBU) Comment:  Events could well take another turn in 
the coming days, but for now it appears likely that Gross 
will keep his position.  Gross's survival is definitely good 
news for his party. Most party members are relieved that 
they will not have to look painfully for a new candidate for 
the post of party chairman at the party congress next month. 
However, this is not good news Czechs who are concerned 
about the scale of corruption or conflict of interest in 
Czech politics. A prime minister with murky financial 
transactions looks set to stay in his position.  And the 
heat from the latest scandals appears to be dissipating so 
quickly that there seems to be no compulsion or sense of 
urgency to strengthen requirements on disclosure of personal 
assets, including family members.  The coalition parties and 
the opposition are very critical of each other's ethics, but 
are very reluctant to take any steps that would force them 
to reveal sources of income, positions on company boards, or 
assets held.   Most Czechs, being both pessimists and 
realists, generally expect a quick return to status quo ante 
and are already complaining that an opportunity to cleanse 
their political system has been wasted.