PM faces party showdown in Brno as crucial tax vote looms

Petr Nečas, photo: CTK

Prime Minister Petr Nečas has a date with destiny this weekend, at a conference of his Civic Democratic Party in Brno. Mr Nečas will try to use a leadership election to put down a rebellion in the party ranks over tax and VAT increases. The row threatens to topple his centre-right government, so the conference is being keenly watched by everyone.

Petr Nečas,  photo: CTK
Civic Democrat delegates head to the Moravian metropolis this weekend for a difficult conference that few of them perhaps are really looking forward to. These are tough times for the party and indeed for Mr Nečas himself. The conference comes after a drubbing in Senate and regional elections. The coalition government’s comfortable 118-seat majority in the lower house has withered away; it can now rely safely on just 99 of 200 seats. It has patently failed to deliver on its objectives; a vote to increase VAT by 1% and raise income tax for high earners has been postponed twice in the last fortnight; parliament is finally due to vote on the bill next week, with a confidence vote attached. If it fails, the government falls.

Pavel Blažek,  photo: archive of the Czech Government
And yet, Mr Nečas is still in charge, of both his party and the country. Few expect anyone else to emerge as party leader this weekend, although equally few expect him to clinch a convincing first round victory. Mr Nečas himself says there is no-one else capable of uniting the party; certainly he is the only candidate, at least for the first round. Others could emerge from the shadows in later rounds if he fails to win an initial majority, the names most commonly mentioned being Justice Minister Pavel Blažek and the Trade and Industry Minister Martin Kuba, although both deny any such ambitions.

Mr Nečas so far has the support of 10 of the Civic Democrats’ 14 regional organisations, although that’s a fairly meaningless statistic as the party leadership is elected by secret ballot and delegates can vote however they want. But the regional nominations give an indication of the mood in the party, and that mood appears fairly disgruntled; certainly Petr Nečas does not have the entire party behind him.

Václav Klaus,  photo: Khalil Baalbaki
A group of six rebel Civic Democrat MPs have defied the prime minister and the government over the tax hikes – crucial for the 2013 budget and the cabinet’s pledge to bring the deficit to less then 3% of GDP. Their stubborn refusal to support a move they claim would go against the party’s right-ring principles is threatening to bring down the Nečas government. Some evil tongues claim that’s a naïve reading of the situation; what the rebels primarily want – with the tacit support of the president, Václav Klaus – is to bring down Mr Nečas, for a number of wholly unrelated reasons. The tax hike rebellion, they say, is merely a fig leaf for their Machiavellian intentions. Both the rebels and President Klaus dismiss those accusations out of hand.

All will become clearer by Sunday, when the leadership contest is decided. Or will it? Because even if Mr Nečas defeats an attempt to unseat him in Brno, there’s no guarantee the rebels leading that attempt will then perform a U-turn and back his tax plan. And if they don’t back it, the government will fall, unleashing the prospect of yet more political instability.