Unipetrol scandal sign that Central Europe privatisation still murky business

Both the Czech and Polish parliaments were this week debating the controversial privatisation of the Czech oil and gas giant Unipetrol to Poland's PKN Orlen. Critics claim that PKN acquired a controlling stake in Unipetrol earlier this year only after bribes were paid to senior Czech government officials, a charge they flatly deny.

We spoke to analyst Jiri Pehe.

"Any big privatisation deal in any post-Communist country always raises a lot of questions, and perhaps it is more a cultural problem or a problem of political culture than anything else, but people simply do not trust politicians and they suggest that any such privatisation deal must be accompanied by corruption."

So fifteen years after the fall of Communism, the general perception is still that this region is beset by major corruption when it comes to large-scale privatisation projects such as Unipetrol.

"Absolutely. Unfortunately this is not only the legacy of the Communist system, but also of the first years of building a market economy, during which politicians in eastern Europe did not pay mention to the rule of law and creating proper legal frameworks for privatisation deals, transparency was lacking or none-existent, and today I think it's all coming back at least in the form of a lack of confidence on the part of the public. I think it will take some time before people start believing any big privatisation deal can actually be clean and transparent, and there will be no accusations of corruption which we basically see in the media in the case of every large privatisation deal."

Some fairly serious accusations were levelled at various people in Poland and in this country, chief among them the former prime minister Stanislav Gross. What effect do you think the Unipetrol scandal is going to have on the ruling Social Democrats in this country?

Jiri Pehe

"So far the Unipetrol scandal doesn't seem to have had any influence on the Social Democrats. The popularity of the party certainly has not dropped in the latest opinion polls. It seems people are on the one hand suspicious of what might have happened during the privatisation process, but at the same time they also understand in many cases such deals are used for political in-fighting and for accusations or political scandalising which other political parties and other political actors are engaged in."

So still a very murky business, privatisation in Central Europe.

"Absolutely. Unfortunately it's all entangled, and unfortunately the post-Communist media are not playing a very helpful role in all of this very often. It seems to me they are manipulated by various political actors and various political forces, and very skilfully used. It is very easy to launch a major scandal in the Czech Republic or any post-Communist country when there is a big privatisation deal, because all you have to do is create suspicion and launch charges that are very difficult to substantiate but then it all leads its own life, simply because people tend to believe there must have been some corruption."