Bloomberg News

Czech Main Ruling Party’s Popularity at Record Low Amid Spy Case

June 21, 2013

Support for the Civic Democrats, the Czech Republic’s largest governing party, fell to a record low after a scandal over illegal spying and graft charges forced out Prime Minister Petr Necas, an opinion poll showed.

The Civic Democrats would get 8 percent in an election, compared with the 20 percent it received in the 2010 ballot, the Prague-based polling company PPM Factum said in a report today. The opposition Social Democrats increased their lead and would get 29 percent, compared with their 22 percent election result, according to the June 14-20 poll of 945 people. No margin of error was given.

The spying scandal added to public discontent with austerity measures that hurt household spending while cutting borrowing costs to record lows. Since Necas quit June 17, the Civic Democrats and their allies have been maneuvering to prevent a snap election sought by the opposition. The Social Democrats pledged higher taxes and more spending to bring the $217 billion economy out of recession.

“The survey is reflecting the impact of the government crisis that led to the resignation of Premier Necas’s government,” PPM Factum said in the e-mailed report.

The Civic Democrats proposed Parliament Speaker Miroslava Nemcova to replace Necas. She needs the approval of President Milos Zeman and the parliament’s confirmation to become the country’s first female prime minister.

Zeman, who has the right to name the next head of the Cabinet, won’t automatically accept any nomination and early elections are a possibility, he said before the largest ruling party announced its candidate.

Meetings Today

Zeman, the Czech Republic’s first directly elected head of state, who has criticized the government’s handling of the recession, will hold meetings with parliamentary parties starting today and plans to announce his decision at a June 25 news conference, his office said.

While the European Union’s second-largest ex-communist economy is enduring a record-long contraction, Necas credited his austerity policies with cutting the yield on the state 10-year koruna bond to an all-time low of 1.48 percent on May 17, according to data compiled by Bloomberg. The yield has risen 7 basis points since the current crisis started, to 2.16 percent today, holding below comparable U.S. Treasuries.

The Czech Republic’s political turmoil erupted June 13 after nighttime police raids resulted in the detention of eight people including the head of the premier’s office.

The current coalition, which controls 98 seats in the 200-member parliament, needs to secure a simple majority in the assembly to install a new government. It has relied on the votes of former coalition deputies who defected their parties to pass legislation.

The Social Democrats, led by Bohuslav Sobotka, promised to raise some income taxes to pay for higher spending the party says is needed to revive the economy. Sobotka may need to rely on the Communist Party to pass some bills if he doesn’t win an outright majority in parliament or fails to find other coalition partners.

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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