POLITICS IN CZECH REPUBLIC, POLAND, SLOVAKIA AND HUNGARY PART 1 OF 5

PREFACE

This is the first part of a five part post dealing with Czech republic: sections on Poland, Slovakia and very briefly on Hungary (see next paragraph) follow and then a short round-up and some personal notes. Also, let me just point out that this post is very much related to Leto’s August issue on Hungary’s Parliament which I did not see until well into my post. I will deal with Hungary in a few lines as Leto has done a far more competent job than I, but I suggest you read the all the posts together. In many ways my posts could have been a massive comment to Leto’s offering rather than a new post.

Czech Republic

Let’s look at other nations in Central Europe – Mittel-Europa if you will – in alphabetical order. Often forgotten is the velvet divorce of 1993 when Czechoslovakia split, totally amicably into 2 sovereign nations. This has had the following legacy. First two sovereign nations that are smaller and therefore more inclined to underline their sovereignty, over and above the natural tendency of those other nations gnawed out of existence by the Hapsburg, Russian (or Soviet) and Prusso-Germanic empires to reassert their identity, national sovereignty and communal validity. The last time they did this was the Dubcek, Svoboda inspired ‘spring’of 1968 when the nations were still the joined Czechoslovakia. Czechs and Slovaks are working more and more together. The languages are similar.

I have a daughter and family in Bratislava and one grandson at Prague uni.. He tells me in some conversations the language difference is like British English to USA English, in other topics more like Portuguese to Italian and very occasionally like French to Rumanian. These two nations compete in a good healthy fashion, yet cooperate and the cooperation is facilitated by the Visegrad alliance. The annual chair changes each July and is currently Poland.  Visegrad provides more information on the cooperation, notably nuclear energy, fiscal reserves, defence and security cohesion, research and development sharing through the IVF.  This regional cooperation works very well and the links to other regions – Nordic (Denmark, Finland, Norway, Sweden) and Benelux (Belgium, Nederland, Luxembourg) is reaping more benefit than individual interactions with Brussels, according to many sources in the V4 and all without the sovereignty drain or regulation encumbrance. There are also many who view the Czech and Slovak economies (except the somewhat trailing eastern Slovak Kosice and Presov region) as being a more advanced market economy with a competitive manufacturing and engineering services base than either Poland or Hungary. These views have rapidly modified and improved over the years as most ‘think-tanks’ of the 1990-2005 period reckoned on at least a twenty year hiatus to complete moves to a market economy and genuine popular democracy. It has been shown to be otherwise. In the current political aura of friction and for historic reasons mentioned above Czech republic has asked the democracy question and demanded discussion on the deficit and accountability of the EU regularly since 2009. President Klaus who asked the questions first now runs the Klaus Institute which has become a focal point for groups who believe the EU to be dysfunctional and/or anti-democratic –  but this could never be considered a very extreme or angry group, although Verhofstadt calls them fascists.

Here is Vaclav Klaus asking reasonable questions of EU Parliament:

Listen to the derision from the bigots in the Parliament and here is his only defence from the Parliament floor:

How is the Czech Republic governed?  Well, as in most of Europe and even in the UK now since 2010 a coalition, often but not always multi-party, is the norm. This often means quite weak government perpetually hinging policy on party compromise. The Czech system has a Senate of popularly elected 81 seats, very much modelled on the US with 6 year terms and 1/3 for re-election every 2 years. The senate is not popular, election turnout is almost derisory and there is talk of doing away with it, or at least reducing it to 3 members for each of 14 provinces – 42 members. It is after all very largely an amendment chamber and only has the right to initiate legislation that is directly related to the constitution. The deputies chamber consists of 200 seats, and a term of 4 years. Since the 2013 scandals power is now a coalition between the CSSD – a social democrat party with 50 seats, a completely new and fairly populist party, but centrist called ANO11 with 47 seats and a nationalist party – KDU-SL with 14 seats, thus a small majority of 111. CSSD leader, a fairly anodyne pro-EU guy called Sobotka, is the PM but his party is outnumbered in the coalition and the Czech president Zeman who has dissolution powers is moving more and more into the ANO11 posture. So CSSD under some populist pressure. Czech issues and accords with the EU Accords a) There is one abiding EU accord and that is agreement, especially from Sobotka on the formation of an EU army. He sees on conflict with NATO and is probably supporting the EU army, without UK not a very strong force, as an encouragement to NATO to increase anti-Russia vigilance and security. No EU army can be effective for a decade.

Issues:

  •  The lack of democracy, accountability and the usual checks and balances between the legislative, executive and judiciary. Appointment and anointment must stop. Czech republic suggested a Senate for the EU with popularly elected equal representation by member with the mandate of safeguarding states’ rights and providing legislative oversight. The model was the US Senate which in turn had been adopted by Czech republic. ‘Not needed’, Senate or any other mechanism was the EU’s obdurate dogmatic reply.
  • Perpetual hassling to join the Euro. The EU wants Czech republic to sacrifice the Koruna, about 28 to the euro. The EU also tried to manoeuvre V3 (Slovakia is in the eurozone) into the 5 year rule. This was a new rule of 2010 that said members must move to the Euro unless treaty-exempted within 5 years of joining. The case went to ECJ and V3 won. Next the lever being used was how well neighbour Slovakia had done but Slovakia is now in gentle, but accelerating retraction, so that argument has fallen away. The latest much more subtle and nasty lever is reducing EU funding. There are several interconnected aspects to this reduction. First all the tendering and contract procedures have been prolonged, especially on hanging projects where delays render structures and implementations from previous tasks useless and only their redoing at local cost permits the project to continue. Second the EU will now only subsidize jointly funded projects. Every euro must be met with at least one Koruna, sometimes the ratio is 1 Euro to 2 Koruna and of course the EU sets the exchange rate. Some of these necessary projects where delay costs massively are in a 1:3 euro to Koruna ratio and the Koruna is 40, not 28 to the euro. This is nothing more than gouging.  More on the funding lever. To give an idea of the projects the EU originally agreed to, but now sabotage for their own imperial will. I suppose in Prague they speak of EU defenestration. The situation would be far worse if direct funding from the Norway and Switzerland special EU deal was not there. Czech use these funds to avert infra-structure disaster –  One major incident is the Prague ring road completion of which leaving unprotected, no fund to pour concrete over metal enfilades before winter. The other is the deliberate delay on the main import/export goods route from Prague to Breslau – Wroclaw in Poland.
  • Migration quotas. Now here there is a clear resistance to the imposition of a quota as a result of a non-existent EU policy of discouragement, border control, registration and standard asylum processes. Czech republic has very strongly critical views of EU migration policy failure. Criticism is responded to with more and more aggression from Brussels.

Few facts on Czech republic: Population of 11 million people, 88% declare no religion: 10% Catholicism. High income economy – 67% of EU average. Energy exporter and a high quality techno-manufacturing economy with a very strong private sector.

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Happy 1016th birthday, Hungary!

It’s St. Stephen‘s day today.  As most readers would know, people celebrate their “nameday” in Central and Eastern Europe and this is the nameday of our founding king, St. Stephen I. There are all sort of programs today: concerts or

Augusztus 20. - Mesterségek ünnepe

the traditional Artisans’ Fair in Buda Castle

Then there will be the fireworks as well tonight, of course.

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From a political point of view,  cabinet minister János Lázár, Prime Minister Orbán’s right-hand man, delivered a remarkable speech this morning:

Hungary has never renounced her sovereignty. An independent Christian state is St. Stephen’s heritage. The European Union is not a many century old political union, it’s a pilot project.  Today’s unelected European leaders with zero legitimacy try to tweak the basic treaties of the EU in stealth mode to their liking.  The EU is stricken by financial crises, Brexit and the migration crisis.  Brussels tries to sweep the chief problem, that is the diminishing prestige of the EU and the uncontrolled millions knocking on the gates, under the carpet with their mandatory migrant quota idea. Hungary’s preserving her sovereignty serves the interests of the European community, too.

If needed then we’ll defend Europe even from herself. Hungary will not let down those European citizens who are dissatisfied with Brussels. It’s not the idea, it’s the practice of  the European Union what is wrong.

There will be an EU summit on the migration crisis and Brexit in the capital of V4 country Slovakia ( Pozsony, Bratislava) in September.  We live in interesting times.

After the EP elections

The EP elections have been held and they changed the political landscape in Europe… and, to a smaller degree, in Hungary, too. So let’s study the results from that large  sample survey  a bit.   The EP election was purely list-based, with a five percent threshold,  the same rules applied as in other EU countries, so the postcommie left-liberals shouldn’t  really whine about unfair election rules, gerrymandering, disproportionality in the election system, what have you.  (Well, they do.)

The voter turnout in Hungary was lower than in 2009 but this is not much of a surprise:  Hungary had general elections in April.  Besides people know it very well in Hungary, too, that Europe’s decision makers are elected in the national elections.  The Eurocrats in Brussels should get this message at last!  The turnout was still almost 30 percents and that’s quite high compared to 13%, the voter turnout Slovakia, our northern neighbour produced…

First and foremost, let’s note that Fidesz won another landslide victory and the poll result I quoted  was about right for Fidesz.   Fidesz has increased their support to 51.5% in the EP elections from 46% in the general elections and Fidesz was the only Hungarian party which got a higher share of votes than on the 6th of April.  What does this entail for Fidesz and Hungary?  It’s certainly a strong reinforcement for PM Orbán in his European policies.

Hungarian Prime Minister Viktor Orbán said already before the election,  in a last minute interview on Saturday, that  “he will not support Jean-Claude Juncker‘s bid to become president of the European Commission even if the centre-right European People’s Party (EPP) wins the European elections”.   Orbán became the first EPP leader to publicly break ranks on the issue but it has turned out quickly  he has the support of British Prime Minister David Cameron.  Orbán and Cameron share anti-federalist views concerning the future of EU and Junckers clearly doesn’t.     I think this event signals that Orbán  is becoming a significant player in the European political arena. BTW, let’s also remember what Statfor CEO George Friedman wrote about  Orbán’s balancing act.

 

The distribution of the cast votes

The far-right party Jobbik came second. (Let’s remember that Marine Le Pen’s National Front won in France!)  However they actually lost voter support:  they got only 15% after  20% of the votes in the national elections.

No doubt the biggest impact of the election is on the postcommunist side.  MSZP came only third, they gained only two seats and they actually came in the fourth place in Budapest (which is the most a leftist/left-liberal place in Hungary)!  DK, ex-Socialist PM Gyurcsány’s extremist left-lib party, and Együtt-PM, ex-Socialist PM Bajnai’s left-lib party almost got as many as votes as MSZP.  Gyurcsány is making a comeback on the left-lib dunghill…  This really seems to be a death blow to MSZP, chairman Mesterházy (and then the whole leadership!) unexpectedly resigned a few days after the EP election.

Bajnai was invited to the Bilderberg-table in Denmark yesterday but the awkward political jester,  Gyurcsány seems to be swooping down on dying MSZP.  We’re going to see much blood on the left-lib political stage in the upcoming months.  The local elections will be held in October.

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Brussels supports VAT fraud

Yesterday the European Commission rejected Hungary’s request yet again to introduce reverse VAT in the sugar trade. This is the second time the EC has rejected such a request by Hungary.  There exists a legal EU framework  called  “Quick Reaction Mechanism” which would allow  member states to introduce emergency measures when they are faced with a serious case of sudden and massive VAT fraud.

Among others, the left-liberal newsportal Index.hu also drew attention to a massive VAT fraud in Hungary which has been going on with the participation of Slovak companies. Statistics show that at least ten billion Forints of VAT are cheated this way each year.

Slovakian sugar which is known to be affected in the massive fraud

Hungary’s government introduced the practice of obliging the buyer, that is not the seller, of goods to pay VAT for grain in 2012, a retail sector where one could also see massive tax evasion.  Data from the National Tax and Customs Authority shows that the change has sharply reduced this kind of tax fraud.

Most of the profit from the sugar VAT tax fraud is pocketed by multinational supermarket chains like Tesco or Lidl.  This sounds like a pretty good explanation to me for  Brussels’ decision.

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The restoration of Central Europe

.. the artificial division between ‘old’ and ‘new’ members of the European Union, or ‘east’ and ‘west’ Europe … are now out of date as never before. The Visegrád countries (the Czech Republic, Hungary, Poland and Slovakia) are no longer nervous newcomers, but self-assured old hands. Their record on economic growth and social peace are enviable. They have also shown resilience in the face of adversity – both in coping with the recent financial crisis, and in dealing with the strains and stresses that followed the collapse of communism. Their politics, for the most part, are boringly stable. Their political co-operation … is increasingly impressive and effective.

wrote   Edward Lucas, the editor of the international section of The Economist in “European Voice”.

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