© REUTERS/Bernadett Szabo

The widespread assumption that good governance and high quality of democracy lead to better policy outcomes may hold true for many countries, but not for all. The 2018 report of the Bertelsmann Stiftung’s Sustainable Governance Indicators (SGI) found that “all eastern European countries (…) achieve better political results than their governance quality would suggest.” In other words, despite democratic backsliding and political polarization, even countries like Hungary, Poland, and Romania receive better scores for policy outcomes than might be typical for countries with institutional and governance problems.

And the SGI report notifies another very important fact: Decreasing the quality of democracy does not immediately reduce citizens’ confidence in the government. The report concludes that “fundamental democratic values are not sufficiently anchored in the political consciousness of a considerable part of society.” A high level of trust in governments with poor rule-of-law scores is mainly observed in central and eastern European countries—and Turkey, which will be left aside here. But what are the root causes of this trust? It would be foolish to focus solely on governmental influence on media, state capture of the public sector, or disinformation campaigns—all of them have their impact, but the origins of this phenomenon have to be searched for in different places.

Own Way Is Best

While these countries are as different as their respective paths, there are a few common features. Firstly, Viktor Orbán in Hungary, Jarosław Kaczyński in Poland, and Andrej Babiš in the Czech Republic have all questioned the transformation process of the 1990s. They have characterized the import of economic liberalism and some political attitudes (but not the whole process of democratization) as a failure, one which primarily served the interests of new political and economic elites and therefore must be undone or corrected. Such political messages understandably attracted a significant number of voters who lost out during the economic transformation process. It’s not an accident that two of these national-conservative and right-wing populist parties, Fidesz in Hungary and Law and Justice (PiS) in Poland, have strong support in economically underdeveloped and peripheral areas.

Secondly, some people still feel left behind despite the improvement of general economic performance since 1990.  In particular, the social policies of the 1990s and 2000s were perceived as underdeveloped by the public, and the new governments partly succeeded in filling this gap. For example, a study by the Polish Public opinion research center CBOS shows how the activities of the state toward the family were assessed over time: from mid 1990s until 2013, only around 10 percent of the respondents rated the state’s policy toward families as good or very good. But since the PiS government came to power and introduced a program of subsidies for families with two or more children, the public rating of government’s family policies rocketed. In 2016 and 2017, around 50 percent assessed it as good or very good, 35 percent as sufficient, and only 10 percent as poor. However, in other social policy areas, especially education, PiS hasn’t been as successful. Poles criticized the government’s education reform for overly centralizing control—they perceive the quality of education to be worse than before.

Thirdly, identity politics also plays an important role in maintaining support for the present governments. Political leaders have exploited the so-called refugee crisis in Europe to consolidate of their popularity. The depiction of refugees as a security threat became part of the political mainstream, and politicians like Slovakian Robert Fico, Orbán, or Babiš have spread the message that their firm attitude of “zero tolerance” would stop migration. Moreover, their political narrative also included islamophobia and bashing of the Western European countries for their policies of tolerance and solidarity. It has to be said that politicians and the vast majority of the public are on the same page in this regard.

Confronted with an East-West Divide

These leaders are aware of the great confidence they enjoy among citizens. They are also backed by good economic performance. Though nothing should be taken for granted in politics—the next general elections could change the current political course, at least in some countries like Poland and Slovakia—the growing self-confidence among the present central and eastern European leaders has implications for the EU.

More generous social policies make people feel that they are being seen and recognized. Moreover, assertive foreign policies create a distinction between the new governments and the previous political elites, who generally followed the western European (development) model.

Migration remains a key issue. The division between some central and eastern European countries on one side and EU institutions as well as some western European countries on the other side regarding compulsory relocation of asylum-seekers still resonates. Especially the Visegrád Group countries (Poland, Hungary, the Czech Republic, and Slovakia) see these liberal migration policies as a threat to their identities, for they believe that the “policies of multiculturalism” would ruin central European societies, value systems, and cultures—as has allegedly happened in western Europe.

Enlargement fatigue—the feeling in some member states, including France and Germany, that the major round of accessions in 2004 has weakened the EU—has transformed into the present East-West divide. The East, for its part, is presenting itself as a confident player, with leaders who are not connected with the liberal transformation and meet the expectations of the public to speak up for their interests at EU level. The quarrel started with migration policies, but it is spilling over into a broader cultural conflict.

Central European leaders win additional points for saying that this part of Europe is different (that is to say better) than western Europe, which must be no longer so diligently imitated. This East-West fragmentation (like the North-South divide on austerity) will play a significant role in the run-up to the European elections in May. And after that, it may be difficult to put the European puzzle together again.

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© REUTERS/David W Cerny

Czech politics have been careening from one drama to another. Andrej Babiš may have emerged victorious after October’s national election, but he is facing an uphill battle to form a stable government. The country’s mainstream parties suffered a big blow, thanks to a large protest vote, and parliament is severely fragmented. The Czech Republic is now facing months of political wrangling that will likely extend into early 2018.

Babiš’s ANO, or Yes, party has won 78 out of 200 seats in the lower house of the parliament with eight small parties sharing the remaining 122 seats. Forming a majority government without the ANO is practically impossible; forming a new government with Babiš is going to be nearly as difficult. None of the other democratic parties appears willing to play the role of junior coalition partner. They also point to an ongoing criminal nvestigation into Babiš on allegations of fraud. The former finance minister denies any wrongdoing and calls the investigation politically motivated. Still, his image has been tarnished.

Ever the shrewd businessman, Babiš will not back down. The only parties willing to entertain Babiš are the far-right extremists and Communists – and he has rejected working with either. Nor will he allow somebody else from ANO to lead the new cabinet. This would run counter to his style as well as his agenda. Instead, he is going to form a minority government, pepper it with some well-known technocrats, draw up a broad, sweeping program, and then try to muster enough votes for a confidence vote in parliament. Expect a lot of back room, eleventh-hour deals.

So when the new parliament opens on November 20 and the outgoing government of Prime Minister Bohuslav Sobotka tenders its resignation, Babiš will be set to take power. To this end, he has made a deal with President Milos Zeman who, in spite of poor health, wants to run for re-election in January 2018. To win, he needs ANO’s voters, so he wants to ensure that the largest party will not come up with its own presidential candidate. President Zeman has already assured the ANO leader that if Babiš cannot win a vote of confidence in the first attempt, he will be nominated for a second attempt.

Who is the Real Babiš?

The Czech Republic’s new strongman is a bundle of contradictions. He presents himself as an anti-establishment leader and an anti-corruption crusader leading the charge against traditional, mainstream parties. He has promised the public he will govern more effectively, or, as his slogan puts it: “run the country like a family business.” Yet he has profited significantly from being part of the establishment during the transition period since the 1990s. Babiš is the second-richest businessman in the country and a media mogul. Moreover, ANO has served as the junior coalition partner in the government of outgoing Prime Minister Sobotka’s. Babiš himself had a decent run for more than three years as finance minister – until he was dismissed this summer over the fraud investigation into EU subsidies for his company.

It is also important to note that Babiš’ business conglomerate stretches across the food, chemical, and media sectors, employing 33,000 people in 250 companies; his Agrofert Holding company spans several EU countries, including Slovakia, Hungary, Germany, and Poland. Even if he were to put his business holding into a blind trust and claims not to have any control over it anymore, Babiš faces many conflicts of interest that will likely constrain him along the way.

Bloomberg or Berlusconi

Babiš’ victory has raised concerns in Brussels; some fear the Czech Republic could now drift in an illiberal, anti-EU direction. Babiš, however, has indicated he is far more interested in domestic policy, and that there will be more continuity in EU affairs than change.

“My name is Andrej Babiš. Perhaps you have heard about me,” he wrote in a letter to EU ambassadors in Prague a few days before the October elections, which was leaked to the media in early November. In the letter, Babiš rejected the description as a “Czech Trump” and similar comparisms. He wanted to be judged by results, he wrote: “So-called traditional political parties say that I am a threat to democracy, since I want to limit parliamentary debates, but I just want to retain German [Bundestag] standards and have rules in these debates’. The letter closes on a personal note: ‘I came to politics to bring transparency. I have not joined politics to enrich myself since I am already rich enough. I came to fight against corruption and waste, clientelism and bring [more] efficiency into governance.”

Babiš points to Michael Bloomberg, the former mayor of New York and successful businessman, as his role model. Perhaps a more appropriate comparison would be Silvio Berlusconi. With Babiš, too, the biggest concern is that his huge concentration of power – and the existence of skeletons in the closet – will cause tensions with the country’s judiciary. This could possibly lead to even more opportunities to exercize political control.

Opportunist, Not Ideologue

However, unlike Orbán in Hungary and Jarosław Kaczynski in Poland, the 63-year-old Babiš is not an ideologue, but a pragmatic businessman. A native Slovak, he cannot be a Czech nationalist; he still speaks a strange and sometimes funny mixture of the two languages. His stakes are indeed in domestic politics, and his interests lie in regulatory policies that may affect his giant business empire. That may also explain why his anti-corruption message lacks depth.

Babiš is eclectic in his rhetoric and actions. He has no strong institutional, cultural, or social connection with his constituency or broader Czech society, and will need to rely on his media and marketing machine to maintain his glossy image and popular support.

His European policy is bound to be pragmatic, non-ideological, and very transactional. There are, of course, there are strong euroskeptic sentiments in the Czech Republic which will limit Babiš’ room to maneuver, but that is nothing new. The previous Social Democrat government was also cautious when talking about Europe. Babiš will probably not improve his country’s EU policy with clear ambitions and strategic consensus, but there are no signs that Prague’s outlook on Europe would significantly worsen.

The ANO’s foreign policy program is underdeveloped, and Babiš has little interest in pursuing it proactively. His instinct is to maintain the status quo rather than deepen EU integration further, and his approach to the current debate on the EU’s future is likely to be rather opportunistic.

Defense and the Euro

However, there is ample room to engage Babiš on EU affairs. He will definitely need good advice and guidance, which is exactly why EU politician Guy Verhofstadt visited Prague in November. The two need each other: Babiš wants a better image in Brussels, and Verhofstadt, as leader of the Alliance of Liberals and Democrats, would like to have another EU leader from his political family. What’s more, Babiš will instinctively try to stay close to Germany and look for new allies in central Europe, like Austria’s Sebastian Kurz.

This could play to the EU’s advantage. It should be possible to convince Prague to get on board and endorse some pragmatic changes. The obvious case is defense and security policy, where it has the support of the public. In fact, all the major parties support Czech participation in the Permanent Structured Cooperation (PESCO), a framework for defense cooperation. But public support can cut both ways: Babiš is also likely to pursue a tough line on migration, refusing any relocation of refugees in the Czech Republic.

Those who advise Babiš on EU affairs within his own party – such as MEP Dita Charanzová – are proponents of the Czech Republic adopting the euro in the longer run. In the short term, it will be interesting to see whether the new Czech government can be convinced to formally enter the euro “antechamber” – the European Exchange Rate Mechanism which limits the floating band of national currencies to the standard fluctuation of plus or minus 15 percent.

An Illiberal Club of Two

On the regional level, the new government is not likely to be very active within the Visegrad Group. Unlike Poland or Hungary, a Babiš-led Czech Republic has no stake in escalating conflicts with EU institutions. The constructive Czech-Slovak tandem within the Visegrad Four is likely to remain in place. As a Eurozone member, Slovakia will gravitate even more toward the EU core, while Babiš will navigate his own path.

So does that mean that Berlin and Paris need not worry? The good news is that the illiberal club of central Europe is still limited only to two members. Yet there is bad news, too: there are concerns that under Andrej Babiš , the Czech Republic will remain a weak and somewhat unreliable partner, mostly absent from the common endeavor to shape EU’s future and overcome East-West tensions.

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