Bloomberg News

Czech Ex-Premier, Foreign Minister in Presidential Vote

January 12, 2013

Former Czech Prime Minister Milos Zeman and Foreign Minister Karel Schwarzenberg will compete to replace European Union critic Vaclav Klaus in a Jan. 25-26 run- off in the country’s first direct presidential election.

Zeman, the former Social Democrat leader who ran as an independent, took the most ballots in the first round with 24 percent, according to results published by the Electoral Committee on the Czech Statistics Office website today. In a surprise second-place showing, the pro-EU Schwarzenberg got 23 percent. Former Prime Minister Jan Fischer, seen as Zeman’s main opponent after running just behind him in opinion polls, was third with 16 percent.

The eastern EU member of 10.5 million is electing a new head of state while the country is mired in its second recession since 2009. The economy is showing weak domestic demand as households and businesses cut spending due to government austerity programs and the euro area’s debt crisis, prompting the central bank to lower interest rates to effectively zero.

“This sets up a vote between a candidate from the left, and one from the right,” Zeman told reporters today. “It’s true, I am associated with the past. But Mr. Schwarzenberg is answerable for what the current government has done.”

Klaus, who was the Czech Republic’s most high-profile critic of the EU and its common currency, is forbidden by law to seek the post again after his second term ends on March 7. One of his most eminent acts during his 10-year presidency was to delay signing of the EU’s Lisbon Treaty in 2009.

Presidential Powers

The president, who was until now elected by lawmakers, selects the political leader who attempts to form a government after general elections and influences monetary policy by holding the sole right to name central bank board members. The position’s powers haven’t changed under the new voting system.

Zeman, 68, and Klaus were rivals in the 1990s when they headed the two largest political parties in the country. Zeman, an economist who worked as a forecaster in the academy of science shortly after the fall of communism in 1989, eventually won the premier’s office in 1998 when his Social Democrats formed a minority government that ruled thanks to an agreement with the opposition Civic Democrats, then led by Klaus.

His economic program for the presidential race included calls for more state investment and restoration of progressive taxation of higher earners. He has opposed Prime Minister Petr Necas’s pension overhaul, a plan designed to boost private retirement savings that was among reasons cited by Standard & Poor’s when it raised the rating on the country’s debt two steps to AA-, its fourth-highest grade, in 2011.

Supporting Growth

Zeman said he would name central bankers who support economic growth and not strive only to meet the inflation and currency-stability goals mandated by the law.

In stark contrast to Klaus, Schwarzenberg, 75, is a strong advocate for deeper integration with the EU. Born into an aristocratic family, he was forced to leave the then Czechoslovakia for Austria after the communists took power in 1948. He served as the chancellor for the first post-communist president, Vaclav Havel, and became foreign minister in 2007.

Two years later the government collapsed while the Czechs held the EU’s rotating presidency, prompting Schwarzenberg to start his own party, TOP09, which promotes EU ties and fiscal responsibility. In 2010, it joined a coalition to form a three- party government with Necas as premier.

“Milos Zeman represents the past and I want change,” Schwarzenberg said after it became clear he would advance to the second round.

Turnout in the first round was 61 percent.

To contact the reporter on this story: Peter Laca in Prague at placa@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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