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Will the Czech Republic be the Latest Victim of an Autocratic Contagion Spreading Alongside Covid-19

Could Prime Minister Andrej Babiš leverage the coronavirus crisis to further crumble the foundation of the Czech Republic’s democratic government?

Kevin Walsh

Global Outlook

Credit: Al Jazeera

With governments around the world taking swift action in the face of the coronavirus pandemic, the Czech Republic must take care to prevent a devolution into autocracy similar to circumstances unfolding in its Visegrad partner, Hungary, and other weakened democracies.

Hungary’s Prime Minister Viktor Orban illegally granted himself dictatorial powers in the face of the coronavirus emergency. In the Czech Republic, courts have already challenged the emergency powers assumed by the government, calling into question the legality and motivation of Prime Minister Babiš’s administration’s actions.

The Czech people need to assert their democratic rights to ensure that Prime Minister Babiš does not use the coronavirus crisis to erode the power of civil institutions, impede freedom of the press and violate the rights of the people.

A State of Emergency Declaration

The Czech Republic declared a 30-day state of emergency on March 12th, adopting measures restricting free movement, closing schools and public institutions, and restricting the operation of businesses to help stop the spread of the coronavirus. The country has recorded over 8,700 cases of COVID-19, the disease caused by the coronavirus, and over 300 deaths have been linked to the virus. Additionally, the Czech Republic has seen virus figures jump in the last week, partly due to a localized outbreak at a state-owned OKD coal mine near the Polish border.

The government requested to extend the state of emergency period until May 25, but the Chamber of Deputies only approved the measures in force until May 17th. However, the anti-COVID-19 restrictions will remain in force until May 25th as the government has converted them into extraordinary measures issued by the Czech Health Ministry.

Objections to these restrictions as an overreach of government power were brought to the Czech courts. A decision issued by the court abolished several of the measures restricting free movement and business operation as of April 27, declaring that the new status of the regulations under the Health Ministry was unlawful according to Czech law.

Bailout or Nationalization for Profit

The emergency measures granted to the government increased power over the private sector and how businesses operate. The challenging economic climate that has accompanied the coronavirus crisis has been particularly hard on the airline industry. The Czech Republic, like many countries worldwide, has severely limited entry to the country.

The country’s finance minister has proposed that the government acquire and nationalize the struggling CSA Czech Airlines. Some analysts have questioned whether the move would be motivated by a desire to save the airline, or as a maneuver to buy a devalued stock to net a profit, effectively defrauding stockholders and boosting government revenues.

Credit: Prague Business Journal

This is not the first time that the government has come under fire for mishandling or illegally nationalizing a private Czech company. PM Babiš played a role in the suspicious nationalization of the same OKD mining company that is currently experiencing an outbreak of the coronavirus when he was the country’s finance minister.

The government had previously opened an investigation into Babiš’ role in allegedly colluding with associates appointed to key decision-making positions within the company. The three men have been accused of orchestrating a corporate raid of the company’s coffers by steering it into bankruptcy, depreciating its stock value, cheating investors and stockholders, and reselling the company to the government for pennies on the dollar.

Nationwide Protests and Conflict of Interest Allegations

Since taking office in December 2017, Prime Minister Andrej Babiš has faced increasing scrutiny over moves to consolidate power and intimidate his political rivals, in addition to allegations of fraud and impropriety. Protesters across the Czech Republic have taken to the streets in anger over the government’s actions and potential crimes committed by Babiš before and during the current public health crisis.

Observers have linked the protests in the Czech Republic to a wider pattern of mass protests across the European continent where demonstrators push back against threats to their rights, eroding judicial independence, restrictions of the free press and a decline in government accountability.

Credit: CNBC

At the end of last year, before the outbreak of the coronavirus, in some of the largest protests recorded in the country's history, demonstrators railed against corruption within the Babiš administration. Tens of thousands of protesters called for Prime Minister Babiš to step down over accusations of misuse of millions of EU funds.

Babiš, a billionaire businessman and one of the richest men in the Czech Republic, has been accused of failing to disassociate from his business interests and gross conflict of interest by using his position to increase personal profits.

These protests followed the recent reopening of a fraud investigation into the prime minister. The investigation move came after a judge overturned a previous decision to drop all charges against Babiš.

The alleged fraud involves $2 million (€1.8 million) in EU subsidies that Babiš approved to be appropriated to a spa resort known as the Stork's Nest, which is owned by members of Babiš' family. In a separate instance, Babiš has also faced mounting pressure from the EU over competing interests in relation to his business empire. The Czech Republic, like Hungary, has had a contentious relationship in recent years with the European Union.

According to observers, the European Commission is currently considered whether to reclaim millions of euros in subsidies that were awarded to Agrofert, the agriculture, food and chemical conglomerate Babiš commanded before moving into the political arena.

Recently, public outcry stopped an attempt by Babiš to use an emergency government meeting to ram through an anti-corruption amendment, which Transparency International reported would enable the PM to evade EU investigative findings regarding conflict of interest related to subsidies paid to Agrofert.

The Czech people must remain vigilant to ensure that Prime Minister Babiš does not grab illegal powers, sideline democracy or overthrow the rule of law during the coronavirus pandemic. In addition to the spread of the virus, autocracy must be prevented from taking hold in the most vulnerable democracies worldwide.

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