US embassy cable - 05PRAGUE1447

C O N F I D E N T I A L PRAGUE 001447 
 
SIPDIS 
 
E.O. 12958: DECL: 10/07/2015 
TAGS: PGOV, PREL, EZ 
SUBJECT: CZECH SOCIAL DEMOCRATS BEGIN TO CONSIDER COMMUNIST 
SUPPORT 
 
REF: PRAGUE 348 
 
Classified By: Pol-Econ Chief Mike Dodman for reasons 1.4 b+d 
 
1. (C)  Summary:  The Czech government under PM Jiri 
Paroubek, in order to secure passage of priority legislation, 
is beginning to break the long-standing taboo against 
cooperation with the Communist party.  Debate over two 
high-profile pieces of legislation, along with a change in 
the Communist party leadership, have raised concerns about 
future influence of the Communists in political decision 
making.  We expect the pragmatic Paroubek to turn to the 
Communists to win support for key Social Democratic 
priorities (like the new Labor Code) -- or threaten to do so 
in order to force the center-right junior coalition partners 
to support him.  However, we accept the prevailing assessment 
that in votes on foreign policy and security issues the 
Social Democrats will continue to work only with their formal 
coalition partners.  End summary. 
 
2.  (SBU) The legislation in question includes the new labor 
bill and a proposal to form a commission to investigate 
allegations of government corruption in the selloff of shares 
in the state-run firm Unipetrol. In both of those cases, the 
junior coalition partner Christian Democrats (KDU-CSL)  took 
public positions strongly critical of Paroubek's Social 
Democrats (CSSD), while the opposition communists (KSCM) 
offered support. On Unipetrol, the Christian Democrats sided 
with the senior opposition party the Civic Democrats (ODS) in 
demanding a parliamentary investigation into allegations of 
CSSD corruption in the 2004 privatization.  The Communists 
sided with CSSD in voting against an investigation (the 
Communists and CSSD together hold 111 seats in the 200-seat 
lower chamber).  Paroubek reacted angrily to the KDU-CSL 
defection and threatened to throw them out of the coalition 
and hold early elections, a threat few took seriously.  But 
it did revive discussions about the possibility of an 
arrangement under which a minority CSSD government could rule 
with the informal support of the Communist Party.  (Note: 
KSCM eventually persuaded Paroubek to accept an investigation 
into the privatization of the entire chemical industry, which 
will include transactions which took place under ODS-led 
governments.) 
 
3. (C) On the new Labor Code, which the cabinet approved on 
Sept 19 despite KDU-CSL objections that it is not 
business-friendly, PM Paroubek has openly declared that the 
bill is so important that he will turn to KSCM in Parliament 
if his center-right coalition partners decided not to support 
it. 
This open statement that the CSSD is willing to turn to the 
unreconstructed Communists surprised analysts.  While 
Paroubek continues to state that the ban on formal CSSD 
cooperation with the KSCM (the so-called Bohumin Accord) 
remains in place so long as the Communists refuse to renounce 
their pre-1989 past and accept Czech membership in NATO and 
the overall importance of transatlantic relations, the open 
discussion of using KSCM to pass legislation is something 
new.  Likewise Paroubek's statements that he would prefer to 
see the 2006 elections result in a minority CSSD government 
dependent on KSCM support over a grand coalition between CSSD 
and ODS. 
 
4. (C) Comment:  We believe the existing 
center-left/center-right coalition will continue to govern 
until next summer, although there will continue to be many 
bumps along the road.  There is no question that Paroubek is 
more willing than his predecessors to turn to the KSCM when 
he believes his survival depends upon it, as apparently he 
felt it did in the Unipetrol investigation.  With the new 
Labor Code a top priority for the left wing of the CSSD, we 
have no doubt that he will make good on his pledge to use 
KSCM to win passage.  But Post continues to believe, as we 
stated earlier this year (reftel) when a minority CSSD 
government was previously debated, that CSSD would turn to 
the Communists only for support on social and economic issues 
like the Labor Code.  While passage of such legislation would 
undoubtedly harm the CR's long-term financial situation, they 
would not directly threaten core US interests in the area of 
defense and security. 
 
5. (C) Comment continued:  Whether or not Paroubek's talk on 
cooperation with the Communists is real or primarily bluster 
designed to keep KDU-CSL from abandoning the coalition, we 
believe the time is ripe for us to raise with Paroubek our 
concerns about recent developments.  We will also report in 
more detail in near future about the KSCM and its position on 
the Czech political scene, as well as its future prospects 
under the new party chairman chosen this week. 
CABANISS