Event

Social Democrat Milos Zeman will become the third president of the Czech Republic, after defeating his centre-right rival and current foreign affairs minister Karel Schwarzenberg in the second round of the first-ever direct vote for a presidential election. Zeman, a former PM (1998- 2002) under Václav Havel’s presidency, had set-up its own left-wing party in 2010, winning a comfortable 54.8% of the vote.

Impact on country risk

Although the role of the president is supposed to be rather ceremonial, the head of the state has yet the power to appoint the prime minister, the constitutional court judges and the members of the board of the Czech National Bank. It can also veto laws passed by Parliament and has an influence on the public opinion. Following the example of his predecessor Vaklav Klaus, Zeman is not likely to keep quiet and is expected to intervene fiercely on the political scene. Cohabitation with unpopular centre-right PM Necas could therefore prove difficult, as Zeman has opposite views on how to get the country out of recession. The ruling coalition is already on shaky grounds, as it does not benefit from a majority in parliament and its popularity has sunk under the weight of austerity measures, scandals and divisions. Zeman’s accession to the presidency will not help to stabilize that position. Zeman’s victory will also represent a breach with the outgoing President’s Eurosceptic stance, with the president-elect supporting EU federalism and enlargement. Zeman is also reported to be close to Russia and Eastern-European countries.

Analyst: Florence Thiéry, f.thiery@credendogroup.com