Event

The Czech centre-right government survived a vote of confidence on 27 April, after the junior coalition party ‘Public Affairs’ (VV) disintegrated some days before when its leader was convicted of bribery. A few days before the vote an impressive march also took place against the austerity measures taken by the government, which gathered about 100,000 protesters and was probably the largest demonstration since the popular revolt that marked the end of communism in 1989. Without the support of the Public Affairs party, PM Necas’ government would have lost its majority in the 200-seat Lower House of the Czech parliament. However, one faction of the cleaved party assembled around Deputy PM Karolina Peake, allowed the backing of the Cabinet, which thus received the support of 105 deputies during the vote of confidence.

Impact on country risk

Henceforth, the increasingly unpopular government only has a small majority in Parliament and its survival is far from guaranteed. Its collapse would mark the end of serious fiscal reforms. This event also reflects the propagation of public and political protest against austerity measures all over Europe, even in a country outside the euro area, which has opted out from the new European Treaty on Stability, Coordination and Governance. The same day as the Czech vote, Romania’s government fell following a similar vote, as opposition parties relied on widespread public anger against plans for spending cuts and tax hikes.

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