Two fairly important events now dominate Czech politics. First, today, the Senate is scheduled to vote on a new electoral law that seeks to change the current proportional voting system into a fairly strong version of a majority voting system, thus favoring large parties. The law was prepared by the quasi-opposition ODS and the ruling Social Democrats, and has already been approved by their deputies in the lower house of Parliament. The trouble is that the Senators are a bit more free-minded than the lower-chamber deputies, and the Social Democrats (CSSD)—currently low in opinion polls—are apparently having trouble persuading all of their Senators to support the new law. However, if the law is not passed, the ODS—currently leading the opinion polls—has threatened to withdraw from the “opposition agreement” with the Social Democrats, and from backing the minority Social Democratic government in Parliament. The outcome will most likely not be settled until the last minute, as some CSSD Senators are reportedly still considering voting against, abstaining, or leaving the Senate at time of the vote. A rejection of the law could, in theory, lead to the fall of the current government.
Second, the ODS used very strong language yesterday against the government and central bank’s actions concerning IPB (the imposition of forced administration and the subsequent sale of IPB assets and liabilities to CSOB). The ODS will seek to establish a special parliamentary committee to investigate the issue and may pursue further action. The lower house of Parliament convenes again on Tuesday of next week.
The combination of today’s Senate vote and the IPB issue creates a very sensitive situation for the minority Social Democratic government. Potentially, if things go wrong for the Social Democrats on both issues, we may see either a new government or early elections. While we do not consider this likely, we find it necessary to point out that the Czech political status quo—the minority Social Democrats enjoying the backing of the ODS—has never been under as much pressure as in these days.