Ministers clear their desks as Nečas government bows out
The government of Petr Nečas held what was most likely its last cabinet meeting on Wednesday, as ministers cleared their desks ahead of the planned appointment next week of a technocrat cabinet to replace it. Mr Nečas’s centre-right government held power for two years and eleven months, and despite the spectacular nature of its demise – with police in balaclavas raiding government offices – the record is not all bad.
Mr Nečas led a three-party centre-right coalition that was swept into power on a wave of popular disgust with corruption and cronyism; in the end, that same coalition was swept away by – you guessed it – allegations of corruption and cronyism, but the story is far more complicated than that and analysts are divided on its legacy.
Certainly the government will be remembered for several far-reaching legislative changes. It introduced a so-called ‘second tier’ of pension provision (the first is the state pension, the third is wholly private pension funds, some with a nominal state contribution). Second tier pension reform allows employees and self-employed people to shave off 3% of their mandatory social insurance contributions and divert them into private funds, on condition they cough up another 2% of their own money. It was supposed to be the crown jewel of the government’s pension reform, but in the end it’s been something of a flop; just 75,000 people, instead of the projected half a million, signed up.
The Nečas government also raised both bands of VAT and reduced the deficit, although at great political cost and with uncertain economic results – the country is currently mired in recession.
The cabinet’s anti-corruption strategy provoked a mixed response. After years of abuse it legislated to end so-called ‘bearer shares’ – anonymous paper stock certificates that are physically stored in safes and under mattresses, with no electronic or even paper records anywhere saying who owns them. Critics say bearer shares are the financial instrument of choice for money laundering, tax evasion and obscuring company ownership in the Czech Republic.
Indeed some observers say his spectacular fall reflects his greatest achievement –the emancipation of the police and the state prosecutor’s office from political control through a series of enlightened appointments. They are clearly no longer afraid of arresting anyone – even senior politicians – and this, say analysts – may be Petr Nečas’s defining legacy.