Nations in Transit - Czech Republic (2003)

Capital: Prague
Population: 10,300,000
Polity: Parliamentary democracy
Economy: Mixed capitalist
Status: Free
PPP: $13,991
Private Sector as % of GDP: na
Life Expectancy: 75
Religious Groups: Atheist (39.8 percent), Roman Catholic (39.2 percent), Protestant (4.6 percent), other (16.4 percent)
Ethnic Groups: Czech (81.2 percent), Moravian (13.2 percent), Slovak (3.1 percent), other (2.5 other)

NIT Ratings	2003
Electoral Process	2.00
Civil Society	1.50
Independent Media	2.25
Governance	2.25
Constitutional, Legislative, and Judicial Framework	2.50
Corruption	3.50
Democracy Rating	N/A

Introduction

The Czech Republic came into being on January 1,1993, when Czechoslovakia split peacefully into two states – the Czech Republic and the Slovak Republic. Under the coalition government of three center-right parties that had come to power a year earlier, the country enjoyed a propitious international environment and stable political and social conditions at home during the first years of its existence. The country's new constitutional framework, which drew primarily on the traditions of pre-World War II Czechoslovakia, provided for a parliamentary system of government and a president with limited executive powers. It also institutionalized elements of democratic governance and a market economy. The privatization of state-owned enterprises was achieved through a combination of restitution of assets to previous owners, standard methods of tender, and a large-scale voucher program.

By the mid-1990s, tensions in the ruling coalition were building and a feeling that reforms were losing pace had emerged. Following the Czech Republic's initial privatization successes, a deficient institutional framework and continued state ownership of the country's major banks came to be seen as obstacles to much-needed structural reforms. The 1996 parliamentary elections, when the ruling parties succeeded only in forming an unstable minority government, contributed to the malaise. An economic downturn that began at the end of the year forced the devaluation of the hitherto stable currency, as well as emergency spending cuts, and ultimately led to the government's downfall in 1997 amid allegations of improper party financing. A temporary government held office until extraordinary elections were held in 1998 and the country's two largest parties, representing opposite sides of the political spectrum, joined together in a somewhat unorthodox alliance. Having entered into the so-called Opposition Agreement, the center-right Civic Democratic Party (ODS) agreed not to seek the overthrow of the minority cabinet of the left-leaning Czech Social Democratic Party (CSSD). The arrangement embittered other parties and many of the country's elites. It also elicited civic protests and occasional mass demonstrations. The strategic aim of the Opposition Agreement – constitutional and electoral reforms – was not achieved.

The strength of the Czech economy also looked uncertain during this period. Macroeconomic imbalances and faulty policies stifled growth, and previously hidden costs of the post-Communist transformation came clearly into view. In response, the government undertook the commendable task of privatizing the country's large banks. However, prior to privatization it improved the banks' balance sheets by removing nonperforming loans from their portfolios. The government also undertook the controversial takeover of the Investicni a Postovni Banka, selling it to another Czech bank under highly favorable terms. The total cost of this transaction to the banking sector is estimated to be as high as CZK 300 billion (US$10 billion). The government succeeded in jump-starting growth only by pouring cash from individual asset sales into the economy and ultimately worsened the longterm fiscal outlook. In 2002, the Czech Republic's budget deficit reached 4.5 percent of gross domestic product (GDP), and according to projections by the European Commission, the Czech Republic is set to hold the highest budget deficit of all European Union (EU) candidate countries until 2005. The public debt currently stands at 20 percent of GDP.

Despite these difficulties, the Czech Republic successfully joined the North Atlantic Treaty Organization in 2000 and proceeded with efforts to become a member of the EU. At a historic summit in Copenhagen in December 2002, the country's hard work culminated in the signing of accession agreements on EU membership. The CSSD government served out its full term into 2002, and elections in June resulted in the formation of a center-left government of the CSSD, the Freedom Union (US), and the Christian Democratic Union-Czechoslovak People's Party (KDU-CSL). Although the new government enjoys only a single-vote majority in Parliament, there is at least a clear delineation between the government and the opposition.

Electoral Process (Score: 2.00)

The Czech Republic's electoral legislation has undergone a variety of changes in recent years. The country's systems for electing local governments, the Chamber of Deputies (the lower house of Parliament), and the president all have come under pressure for reform. The particularly bitter fight over changes to the procedures for electing members of the Chamber of Deputies has been at the core of political developments for the last three years. Previously, elections to the chamber were based on a proportional, party-based system consisting of seven electoral districts and a 5 percent threshold for gaining seats. However, reform of the electoral system was one of the central goals of the Opposition Agreement between the ODS and the CSSD, both of which argued that the proportional system insufficiently facilitated the creation of strong governing majorities. Other parties felt that such change would not be in their interests.

In 2000, Parliament passed a new electoral law solely with votes from the Opposition Agreement bloc. Although the new legislation provided for a proportional system, it called for modifications to the existing system that had the effect of concentrating mandates in favor of stronger parties and establishing a higher threshold for coalitions. The Christian Democratic Union – Czechoslovak People's Party (KDU-CSL), the Civic Democratic Alliance (ODA), the Freedom Union (US), and the Democratic Union (DEU) – also known as the Coalition of Four – and President Havel decried the new law as an opportunistic power grab. The president and a group of senators filed briefs against the relevant sections of the law with the Constitutional Court, arguing that the new system breached the constitutional provision that elections to the Chamber of Deputies should take place "according to the principles of proportional representation." In January 2001 the court ruled in the plaintiffs' favor, taking the view that the electoral system should not only be technically proportional but also have predominantly proportional effects. Consequently, Parliament passed a new law that called for a vote-counting system similar in its effects to the one in the previous law and whose changes were limited mostly to accommodating the existence of the new self-governing regions that came into being in 2001. Passage of the compromise law had a far-reaching impact on the Czech political landscape. On the one hand, the Coalition of Four, with the threat of a disadvantageous electoral system having been removed, lost its drive to build a single, integrated political force capable of winning elections. Instead, its members focused more on becoming attractive to their prospective coalition partner of choice, the CSSD. The Coalition of Four, which became a twomember coalition by joining the US with the DEU and expelling the ODA, entered the government after the June 2002 election, but the liberal US suffered a loss of political identity after that and its support in the polls fell below 4 percent. On the other hand, the Opposition Agreement parties – the CSSD and the ODS – were deprived of the long-term political benefits of their alliance and were left to suffer its drawbacks, namely their unpopularity with the general public and many of their own supporters.

The CSSD proved victorious in the June 2002 election to the Chamber of Deputies with 30.2 percent of the vote, followed by ODS with 24.5 percent, the Communist Party (KSCM) with 18.5 percent, and the Coalition of Four with 14.3 percent. No other party overcame the 5 percent threshold to secure seats. (The Green Party, the next most successful party, took only 2.4 percent of the vote.) There were no major complaints against the conduct of the vote, and the monitoring mission of the Organization for Security and Cooperation in Europe declared the election free and fair. The most conspicuous feature of the vote was low turnout – only 58 percent. This represented a sharp decrease over previous elections to the Chamber of Deputies in which voter turnout had never sunk below 70 percent. Another important feature was the success of the KSCM, which registered its best showing ever. It also was the only party to experience a gain, compared with the 1998 election, both in relative (7.2 percent) and absolute (220,000 more votes) terms. All other parties, including the victorious CSSD, lost parliamentary seats. Since the Czech Communists, unlike their counterparts in neighboring post-Communist countries, have never fully renounced their totalitarian past, their showing is worrying. Although there is no consensus among observers of Czech politics about the reasons for this development, various explanations have been put forward. Some have suggested that the CSSD, no longer in opposition, lost its ability to siphon off Communist voters. Others point to the legitimization of the Communist Party as a result of the appearance in the campaign of the theme of the "Sudeten German threat." Still others suggest that the KSCM enjoyed such a strong showing owing to the voting public's general disgust with the democratic politics of the Opposition Agreement era.

The new government is led by the CSSD, with the KDU-CSL and the US as its junior partners, and is composed solely of members of those parties. The clear demarcation between the government and the opposition (now the ODS and the KSCM) is a welcome departure from the Opposition Agreement toward a more standard arrangement. However, the government relies on a majority of just a single vote in the Chamber of Deputies. In addition, the political differences within the ruling coalition are sizable, and the government has already suffered legislative defeats. Some members of the CSSD hint at the possibility of dispensing with the US and relying instead on Communist votes. The Communists themselves gain the most from this situation, aligning themselves sometimes with the government and at other times with the ODS. Where the KSCM was once shunned by political parties for failing to renounce its past, it now is rewarded by proportional representation in various governmental and parliamentary councils. The weight of the Communist vote now makes the continuation of this attitude untenable, and it is just a question of time before the KSCM becomes part of a government coalition.

Parliament amended the Law on Municipal Elections in 2000 by moving it in the direction of more concentrated mandates for stronger parties. This legislation was less controversial than the law governing elections to the Chamber of Deputies and was not challenged. Municipal elections in November 2002 took place according to this law. Voter participation was 43 percent, compared with 45 percent in 1998 and 61 percent in 1994. Elections to the governing bodies of the country's new self-governing regions were held for the first time in 2000; voter turnout was 34 percent. Elections to the Senate, the upper chamber of Parliament, consistently draw the lowest turnout of voters. Although the 1992 Constitution contained provisions on the Senate, the body did not come into being until 1996. The Senate does not have the power to approve and recall governments, nor does it vote on state budgets. Although the Senate may act on legislation, the Chamber of Deputies often overrides its amendments. Bills on which the Senate does not act are deemed to have its approval. The role of the Senate in the eyes of the general public remains unclear, and calls for its abolition are still occasionally voiced.

Members of the Senate are elected to six-year terms from 81 single-mandate districts according to a two-round majority system. A third of all Senate seats come up for election every two years. Turnout for elections in 2002 was 24 percent in the first round and 32 percent in the second round. In 2000, voter participation was 33 percent in the first round and 21 percent in the second round. Only a candidate who gains more than 50 percent of the vote can win in the first round; otherwise a second round must take place. In contrast to the similar French system, only the two strongest candidates proceed to the second round. If there are numerous candidates and voter participation is low, a miniscule number of votes can decide who proceeds to the second round. Ultimately this diminishes the legitimacy of the Senate.

The president is elected by both chambers of Parliament in a process that requires a high level of consensus. There are no special registration requirements for presidential candidates, but only groups of 10 or more deputies or senators may make nominations. The last presidential election took place in 1998 and was free and fair. With the towering personality of Vaclav Havel gone, the election of his successor in 2003 is expected to be difficult.

The Czech political system is based on political parties and is rooted in a constitutional commitment to their "free competition." The functioning of parties, however, leaves much to be desired. Although most political parties are organized as mass-based groups with exclusive membership requirements, their actual membership numbers are very low. There are numerous other parties in the Czech Republic, but they lack sizable memberships and sustained influence on national politics. By the close of 2002, the Ministry of the Interior had registered 118 political parties and movements, several of which were no longer active.

Table 1. Reported Membership in Leading Czech Political Parties

PARTY	MEMBERSHIP
Communist Party of Bohemia and Moravia (KSCM)	220,000
Christian Democratic Union – Czechoslovak People's Party (KDU-CSL)	50,000
Civic Democratic Party (ODS)	18,000
Czech Social Democratic Party (CSSD)	18,000
Freedom Union-Democratic Union (US-DEU)	800

Recent legislative changes provide generous state financing for parties represented in Parliament. Funds are granted according to a formula based on the number of seats each party holds in Parliament, regional assemblies, and large municipal assemblies. Parties also receive a contribution for election campaign costs based on the number of votes received in previous elections. Any party receiving more than 1.5 percent of the vote in an election to the Chamber of Deputies is eligible for state support.

Political parties must register with the Ministry of the Interior. According to the Law on Associating in Political Parties and Political Movements, registration is denied to groups that break laws, seek to abolish the democratic foundations of the state, are not governed by democratic rules and organs, or seek to hold power at the exclusion of others or deprive citizens of their equal rights, or to those whose activities endanger morals, public order, or the rights of citizens. These provisions have occasionally been used to deny registration to extremist parties of both the left and the right. In one case of apparent abuse of the process, the Liberal Party was denied registration in 2001 on the grounds that it opposes legislation that outlaws so-called verbal crimes such as the promotion of fascism and communism. The Supreme Court heard an appeal by the Liberal Party in April 2002, affirming the Ministry of the Interior's argument that the group's goal is contrary to the constitutional order. When the Constitutional Court refused to hear an appeal, the party decided to takes its case to the European Court for Human Rights.

Ethnic minorities in the Czech Republic do not have political representation of any note at the central level. Past attempts at political organization among the Roma (Gypsy) minority ended in fragmentation and futility. Nonpolitical minority organizations do exist. Their representatives engage in the government's Council for National Minorities and cooperate with governing bodies on both the regional and municipal levels.

Civil Society (Score: 1.50)

Civil society in the Czech Republic is an increasingly vibrant and mature part of the social and political fabric of the country. The most common form of voluntary organization is the civic association. As of November 2002 there were 54,895 nongovernmental organizations (NGOs) registered in the country. Of these, 46,151 were civic associations; however, only about two-thirds were considered active. The remaining NGOs consisted of church-related organizations (4,810), foundation funds (786), public benefit organizations (707) and foundations (328).

Czech NGOs are active in many fields, including sports, the environment, culture and cultural preservation, and social and health services for the handicapped, the elderly, and other disadvantaged groups. Several organizations successfully participate in the provision of international humanitarian aid. A limited number of groups – the most active being environmentalists – engage in the dissemination of ideas or in public advocacy. An even smaller number of organizations fit the category of public policy think tanks.

The legal foundations for the various types of Czech NGOs include the 1990 Law on Association of Citizens, the 1995 Law on Public Benefit Corporations, and the 1997 Law on Foundations and Funds. These latter two laws were amended in 2002. Writing for the Trust for Civil Society in Central and Eastern Europe, analyst Petr Pajas noted that the original laws had "introduced many positive changes in the legal environment – especially in the areas of transparency, accountability, and governance." However, according to Pajas, "certain changes in these laws were found to be necessary." The amendments to the Law on Public Benefit Corporations allow groups to establish branches abroad and to dismiss board members who violate their bylaws or statutes. In addition, foreigners may now establish public benefit corporations in the Czech Republic and serve on their boards without restriction. The changes to the Law on Foundations and Funds improve the mechanisms for investing foundation assets.

A small number of anti-liberal organizations do exist in the Czech Republic, and the Ministry of the Interior monitors them in its regular report on extremism. Groups on the extreme right express mainly anti-Roma and anti-Semitic sentiments and often are connected to racist attacks. Some groups maintain contacts with similarly oriented groups abroad. An attempt to integrate the extreme right into organized politics by forming a party before the 2002 election foundered owing to organizational and financial problems. Groups on the extreme left are inspired mostly by anarchist, anti-capitalist, and anti-globalist ideologies. Organizations like these usually have only a few dozen members.

Experience and training have contributed to ongoing improvements in the organizational capacity of Czech NGOs. In particular, several large foundations run workshops and seminars on organization, fund-raising, project management, application writing, communications, and other topics. The situation is much better in Prague, though, than in other parts of the country. Many NGOs are too overloaded with day-to-day project work to pay sufficient attention to strategic planning. In addition, the culture of volunteerism is not sufficiently developed, and few NGOs devote systematic energy to building a network of supporters. The importance of boards of directors is not always fully grasped.

The nonprofit sector is heavily dependent on the state and large foreign donors for funding. However, foreign grants are in decline and are set to decrease substantially when the Czech Republic joins the EU. To address this growing regional problem, several large Western foundations partnered in 2000 to form the Trust for Civil Society in Central and Eastern Europe. The trust's mission is to "support the development and long-term stabilization of civil society in Bulgaria, the Czech Republic, Hungary, Poland, Romania, Slovakia, and Slovenia."

Transparency in the government's financing of NGOs has increased in recent years. Since 1999 the government has adopted a list of civil society activities that it will fund each year through NGOs and then publishes a list of available contracts. However, this system limits capacity building by NGOs because the state offers support only on a year-to-year basis without the promise of renewal. The state also lacks sufficient mechanisms for evaluating the effectiveness of the organizations to which it provides grants. In 2000, state entities granted CZK 3,161 million (US$105 million) to NGOs.

The nonprofit sector also has benefited from grants directed to the endowments of Czech foundations. The Foundation Investment Fund was established in the early 1990s with proceeds from the privatization of state enterprises. In tenders in 1999 and 2001, Parliament gave grants totaling $50 million to 73 foundations. When this process brought to the attention of foundations the need for better financial management, several groups associated with the Donors' Forum, an umbrella group of Czech foundations, jointly established a professionally managed investment fund for their endowments. Nevertheless, the financial position of domestic foundations remains insufficient to provide the majority of financing for the country's nonprofit sector. On average NGOs receive about 39 percent of their funding from the government.

The public generally views the nonprofit sector favorably, and the government engages groups in a more open manner today than it did in the first half of the 1990s. Media coverage of NGO activities has improved as large groups have grown more media-savvy and media outlets, in turn, have shown more interest in their work. For instance, Mlada Fronta Dnes, the most widely circulated newspaper, devotes a weekly public service section to a particular NGO.

During the floods of August 2002, Czech NGOs were engaged heavily in relief work. The Czech public appreciated these efforts and responded by volunteering their time and making donations to the effort. The two largest NGO collections brought in CZK 250 million (US$8.3 million) and CZK 33 million (US$1.1 million) respectively, while a government-sponsored effort resulted in donations of CZK 142 million (US$4.7 million). The NGOs often seemed more flexible in their ability to respond to the crisis and more knowledgeable than state officials of the flooded areas' specific needs.

Trade unions are free, and the government accommodates their ideas on labor legislation. Although most unions are close to the CSSD, with several union leaders even having become Social Democratic politicians, they function independently in their efforts to protect the welfare state. The Czech-Moravian Confederation of Trade Unions, an umbrella organization that unites most but not all trade unions, has published complaints from workers about the difficulties they have encountered in registering unions in several foreign-owned hypermarkets. About 25 percent of the workforce belongs to a union, but that number is in decline.

Czech law does not regulate interest group participation in the country's political life. NGOs, professional associations, and interest groups may be invited on an ad hoc basis to participate in political deliberations. However, this rarely happens in practice. A group known as the "Tripartite" does bring together the government, an association of employers, and trade unions on a formal basis to discuss welfare and economic policy. Governmental councils on minority, Roma, and NGO issues are exceptions. Both local and national environmental groups have been active in waging public campaigns, most notably in protest against the construction of the Temelin nuclear power plant and a number of other industrial and infrastructure projects. Some members of NGOs have begun to transform their social activism into the direct pursuit of political power. In 2001, for example, a group of activists joined the leaders of the Christian Democratic Party and the Freedom Union in signing a joint document known as the Brandys Declaration, which detailed a variety of policy goals such as increased state financial commitments to the nonprofit sector. The same activists then conducted a voter-education campaign that was slanted against the ODS. Following the 2002 elections, an environmental activist set out to take over the top leadership post in the Green Party.

Successful efforts have been made since the beginning of the 1990s to purge the educational system of political propaganda. However, elementary education is still criticized as rigid and unresponsive to students with special needs. The discriminatory practice of placing Roma students in special education schools also remains a problem. The greatest difficulties facing institutions of higher education are a lack of funding and the unwillingness of the political class to reform the university system and expand opportunities for higher education to a wider segment of the population. The Czech Republic lags behind not only Western states but also neighboring countries in the proportion of the population that receives a university education.

In 2002, of the country's 1,021,000 elementary school-aged students, 6,744 were enrolled in private schools (both religious and parochial); 75,196 out of 487,000 students at the secondary level were attending private schools. Private universities have been in existence since 1999 and currently enroll about 7,000 students. Private schools receive state subsidies on a per-student basis. However, parity with state schools is not guaranteed by law, and the size of the state's contribution is negotiated on an ad hoc basis. The previous government was not a friend of private education, the defense of which was one of the few issues to unite right-wing parties in Parliament. The current government came to power promising to "preserve the comparable conditions" of public and private schools.

Independent Media (Score: 2.25)

Czech media are free but not without problems. Ceska Televize (Czech TV), the public service television broadcaster, has been plagued by political problems and does not fully fulfill its role as a provider of high quality, thorough, and impartial information. Both CT and TV Nova, the dominant private television broadcaster, attract as much attention from their own management and ownership disputes as they do from their programming. With the exception of a few specialized journals, no media are state-owned. Czech TV, Czech Radio, and the Czech Press Agency are independent public service institutions that were established and endowed with property under Czech law and are overseen by councils appointed by the Chamber of Deputies. The two state broadcasters are partially financed by obligatory fees collected from individuals who own radios and TV sets. Parliament establishes the fees, and the broadcasters collect them. Czech law outlines the general aims of the broadcasters, and in a 2001 amendment Parliament approved a more detailed code of standards for Czech TV.

The newspaper market has experienced consolidation in recent years, and a number of national and regional titles no longer exist. Blesk, the country's most popular paper, is a tabloid. Super, which was Blesk's biggest competitor, folded in 2002. With the exception of Pravo, all of the major daily newspapers are controlled by foreign – predominantly German – owners. Although some observers have expressed concern that the papers' foreign owners are negatively influencing news content, the fears seem misplaced. Of greater concern is the concentration of media ownership. Mlada Fronta Dnes and Lidove Noviny, two of the four most serious national papers, share the same owner. Practically all regional dailies are also owned by a single investor.

Foreign owners contribute to a different problem. Although they operate reputable businesses, most are publishers of regional, not national, newspapers in their home markets. (The only exception is Hospodarske Noviny, which is owned by the U.S. firm Dow Jones and the German company Handelsblatt.) As a result, they do not seem to have a sufficient understanding of the role and significance of the national newspapers they publish in the Czech Republic. At many papers, this has led to a lowering of the level of content and to pressure to skimp on human resources. Only Hospodarske Noviny has begun to pursue a strategy of building a quality readership. Other papers tend to pursue the highest circulation levels possible.

Table 2. Major National Newspapers

NEWSPAPER	AVERAGE PAID CIRCULATION*
Blesk	412,151
Mlada Fronta Dnes	305,556
Pravo	202,736
Lidove Noviny	92,480
Hospodarske Noviny	75,513

Tabloid magazines, TV guides, hobby magazines, and women's magazines dominate the Czech magazine market. TV Magazin, the highest-selling magazine, has a paid circulation of 506,103; Tyden, the most successful news magazine, has a circulation of 61,394. Although a handful of independent newsweeklies provide a variety of viewpoints, their impact on the market is low. Periodicals like these typically either have strong financial backing or must devote most of their space to soft news and human interest stories in order to survive. Respekt, the best-known opinion and news magazine, has been operating at a loss for several years, and its experience suggests that the economic environment for such publications is difficult.

Czech Radio, the national broadcaster, operates four stations with different formats. Radiozurnal, its pop music and news station, is the most listened-to station in the country. This station is followed closely in popularity by the private stations. There are a number of national and regional private radio stations, most of which broadcast low-cost pop music and talk programming and none of which has any significant news-gathering capacity of its own. The Czech broadcast of Radio Free Europe ended in 2002.

Although some of its staff moved over to Czech Radio 6, a news station run by Czech Radio, the Czech service of the BBC assumed the role of the country's most respected news station. BBC's Prague-based staff produces news and several hours of commentary and discussions daily. TV Nova dominates the Czech television market. TV Prima, another private station, has been gaining in market share, while Czech TV has been stagnant since experiencing a steep fall after the launch of TV Nova in 1993.

Table 3. Average TV Viewership, January to June 2002

STATION	PERCENTAGE
TV Nova	44.23
Czech TV 1	20.50
Czech TV 2	10.38
TV Prima	19.60
Others	5.29

The regulation of broadcast media suffers from both incoherent legislation and the faulty performance of the Council for Radio and Television Broadcasting, the state regulator whose members are appointed by Parliament and which is often viewed as protecting the interests of the ODS, the CSSD, and TV Nova. In addition, individual broadcasters are not without problems, particularly in terms of the quality and objectivity of the programming they produce. TV Nova and Czech TV provide two cases in point. TV Nova's news programs are often manipulative and biased. During the 2002 election, for example, its coverage was slanted in favor of the ODS, the CSSD and the KSCM at the expense of the KDU-CSL and the US. At the same time, though, its news programs often carried important developments that the public service broadcasters missed. Czech TV, for its part, has responded to pressure to compete with the country's commercial broadcasters by highlighting ephemeral news, pushing foreign news to the back of the program, and reducing the length of news items. The failure of Czech TV to fulfill its role of providing quality information and space for informed debate became apparent during the 2002 election campaign. In previous years, Czech TV often was accused of playing an activist role in support of particular political parties. In 2002, though, its role in the elections was significantly diminished and it featured only rigid roundtable-style debates before prime time. Czech TV's main evening news broadcast largely avoided election news, leaving other media outlets to break important events that influenced the campaign.

Czech TV has been in a chronic state of crisis for some time; the crisis reached its high point but certainly not its end during the "TV crisis" of December 2000 and January 2001. In November 2002, the broadcaster lost its fifth director in as many years. This predicament is fueled by a combination of causes that include the temptation of politicians to try to influence its work, the lobbying interests of employees and film industry professionals, and an ill-defined mission. The problems of Czech Radio are not as prominent, probably because the financial and political stakes associated with it are lower.

Czech media are editorially independent. Infringements on their independence have been alleged but are difficult to assess. Likewise, anecdotal evidence suggests that the influence of lobbyists and public relations agencies is substantial. Often contributing to the problem are opaque and concentrated ownership structures.

The legal framework for press freedom can be described as adequate. However, problems arise in its implementation and interpretation. For example, many prosecutors and judges do not posses a sufficient understanding of the issues related to press freedom and their judgments are overtly restrictive or simply incoherent. A case in point was that of journalist Ivan Brezina, who in 2001 sued Prime Minister Milos Zeman for asserting publicly that a power-generating company had paid Brezina for articles he wrote on energy policy. Although the trial revealed that Zeman had based his assertion on inaccurate information and the judge ordered Zeman to apologize, Brezina actually lost the case on appeal and was forced to pay court expenses. In 2002, Minister Without Portfolio Karel Brezina (unrelated to Ivan Brezina) successfully sued cartoonist Stepan Mares for publishing comic strips that depicted Brezina engaging in sexual acts, even though the drawings also contained political commentary.

Although provisions on libeling the president and prime minister have been removed from the criminal code, the code's broad provisions on criminal libel remain in force. Lawmakers are considering those provisions' repeal, but those who favor the statute argue that it produces swifter and less expensive justice than the available civil remedy. To the apparent approval of the general public, this statute was used in 2002 in the successful prosecution of reporters from the tabloid Blesk for information they had reported on two popular actors.

The Syndicate of Journalists, the main professional journalistic association, has about 3,500 members. Of these, approximately 40 percent are women. The syndicate is active both in representing journalists' interests to policy makers and the public and in cultivating higher professional standards. The organization's recognition and prestige is growing but should be higher.

Governance (Score: 2.25)

There is no evidence to suggest that the Czech government will be forced to seek extra-constitutional resolutions to problems at any time in the near future. However, "stable" might be too strong a word to describe the country's current system of governance. Given the failure of electoral reform in 2001, national elections could keep producing a Chamber of Deputies that is incapable of supporting strong, effective majorities. The inability of the country's political elites to keep public finances in good shape contributes to institutional weakness as well. Despite problems like these, successive governments have managed to maintain broad support for important stabilizing measures needed to prepare the country for entry into the EU.

Since 2000, steps have been taken to improve transparency in the functioning of executive and legislative bodies. For example, draft legislation, transcripts of parliamentary debates, records of plenary votes, and copies of government regulations and resolutions are now available online. The Freedom of Information Act, which Parliament adopted in 1999, is being exercised most vigorously at the local administrative level, and an independent Web site is devoted to monitoring the functioning of this law.

Members of Parliament have a research unit at their disposal and sufficient funds to commission expert reports and analyses. However, they lack sufficient interest in soliciting broad public input in policy making. As one knowledgeable lobbyist put it, "Typically, a policy idea is generated by officials in a vacuum. This is not surprising when one considers how little consultation there is in the Czech Republic between officials and those affected by policy." Information such as analysis of politicians' voting records is nonexistent, and independent structures providing expert examinations of policy are undeveloped. Instead, policy develops mostly in a closed system in which various interests approach policy makers directly and outside of public view.

The Constitution provides for self-government by municipalities and regions. Local communities are governed by elected bodies and may issue local regulations within the boundaries of the law. They also may own property and maintain their own budgets, but their influence over income generation is limited. Municipalities and regions have authority over property tax rates and may introduce certain fees, but the bulk of their income comes from the redistribution of central funds and is only partially related to the economic output of the community itself.

The Constitution contained provisions on self-governing regions when it was adopted in 1992, but these 14 administrative divisions only came into existence in 2001. While responsibility for education, cultural activities, health care, social services, and transportation has been transferred to the self-governing regions from the state, this process has not been accompanied by a commensurate reduction in the number of bureaucrats in the central government and actually has resulted in a reduction of state services for some citizens. Nevertheless the new regions gradually have been gaining legitimacy. They proved themselves particularly useful in helping communities cope with the August 2002 floods.

The efficiency and professionalism of the civil service has been considered insufficient for many years. Civil servants operate under the provisions of the Labor Code just like any other Czech worker. The Code of Ethics for Employees of the State Administration, which the government approved in March 2001, is vague and has had minimal publicity. At the urging of the EU, a new law on civil service was adopted in June 2002 and will be phased in over the next four years. The new law sets detailed rules for civil servants, among them limitations on their business activities, minimal educational standards, and requirements for passing periodic exams. It also shields them from political interference and grants them above-average compensation, a high level of job security, and social privileges such as longer paid leave. Several attempts at passing similar legislation failed in the past because of the fear that the introduction of privileges such as job security would only encourage civil servants to be unresponsive to the public's needs. The new law enshrines an expansive number of such privileges and contains few safeguards against their abuse.

Constitutional, Legislative, and Judicial Framework (Score: 2.50)

The Constitution provides for a system of checks and balances between legislative, executive, and judicial authority. The Czech National Bank, whose independence the Constitution also establishes, is sometimes considered a separate branch of government. Parliament often amends government bills substantially, adopts bills submitted by members, and in certain cases votes across party lines. In fact during the years of the Opposition Agreement, the CSSD government passed many important bills not with the support of its partner, the ODS, but with votes from the Coalition of Four and even the Communists. Still, under the country's party-based parliamentary system, the Chamber of Deputies does not act as a separate political force unconnected to the government. The Senate behaves differently, but its significance is minor in day-to-day political life.

The president enjoys limited but important powers in appointing the government, ambassadors, members of the Czech National Bank's council, and Constitutional Court judges. However, under the Constitution, the president is not accountable for the exercise of these and other powers. In recent years, when relations between the president and the prime minister often became polarized, some politicians argued that minor clarifications were needed in the constitutional division of power. It is possible that a consensus would have formed on the nature of such changes if it had not been for the charged political climate of the Opposition Agreement years in which any such attempt was viewed with suspicion by the opposing side.

The Constitutional Court is charged with interpreting the Constitution, and it performs its role vigorously. It also reviews the constitutionality and compatibility of judicial decisions and legislation with binding international norms. In addition to other cases already cited in this report, the court found in 2002 that the government's regulation of rent control was unconstitutional. It also struck down parts of the Law on Churches and Religious Societies that limited the right of churches to establish separate legal entities for purposes other than narrowly understood religious activity without the state's approval. Since the president or a group of members of Parliament may submit a law or a section of a law for constitutional review, the court sometimes finds itself being viewed as an additional legislative chamber and criticized by politicians who disagree with it. Overall, the court's decisions are respected by the country's broad political spectrum. Only a small portion of its findings are considered controversial.

The criminal code has experienced continuous modifications, and it is widely acknowledged that a new code is needed. Judges authorize searches and pretrial detentions. Although bail has been introduced, pretrial detentions are still often excessively long and judges are criticized for being too accommodating to prosecutors. The state appears to respond too eagerly to societal demands for a "strong hand." Hard-charging, media-savvy investigators and prosecutors receive favorable media coverage, and TV stations use police footage indiscriminately. Recent legislation veered in the direction of criminalizing acts that should be the domain of civil or administrative law. For instance, an amendment to the criminal code in force since July 2002 makes it a criminal offense for a physician to issue a fraudulent certificate of sickness.

Political rights and civil liberties are articulated in the Bill of Basic Human Rights and Freedoms that is an integral part of the Constitution. The Czech Republic is also party to numerous international conventions on human rights. Human rights are enforced by the courts. Their observance and advancement is also the focus of several governmental bodies: the Government Council for Human Rights, the Government Council for National Minorities, the Government Council for Issues of the Roma Community, and the Government Council for Equal Opportunities for Men and Women. These bodies monitor developments in their fields, coordinate policy, and advise the government. They also may be entrusted with drafting legislation. The Office of the Public Defender of Rights, or ombudsman, began to function in 2001 and to date has dealt mainly with the shortcomings of state administrative bodies. Although it can urge offending bodies to provide redress, it has no power to order them to act.

Recent reforms of the criminal code, the civil code, and the labor law have been aimed at improving the country's antidiscrimination efforts. These changes include the transfer of the burden of proof from the defendant to the plaintiff. In February 2002, the government approved a comprehensive report, Report on the Possibilities of Measures to Eliminate Discrimination, which proposed a variety of measures and legislative changes. A new comprehensive antidiscrimination bill is now being drafted.

Parliament approved a new law on churches in 2002 that reduced barriers to registration by lowering from 10,000 to 3,000 the number of adherents needed to register a new religious group. However, the law also contains a controversial provision designating a special category of churches that are authorized to perform functions such as teaching religion at state schools and conducting religious activities within the armed forces and in prisons. Eligible churches must have adherents equal to at least 1 percent of the population (approximately 10,000 persons). The Constitutional Court struck down provisions of the law that limited the ability of churches to establish separate legal entities such as charities.

Corruption (Score: 3.50)

According to Law 238/1992, members of Parliament, government ministers, and heads of government agencies must make annual declarations of income, gifts, and any real estate property they or their spouses might have acquired. Ministers and heads of government agencies are barred from holding any other job or engaging in business activities other than the administration of their own properties. They also cannot simultaneously be members of Parliament. The limitation on business activities does not apply to members of Parliament, who simply must declare such work or that of their spouses. Members of Parliament also must reveal any conflicts of interest (including those of spouses and other relatives) associated with any issue that they are debating, voting on, or considering the submission of proposals for.

There are no meaningful penalties for submitting false declarations. Although a parliamentary committee exists to conduct inquiries into such behavior, it cannot take action against proven improper conduct. No such inquiry has ever even taken place. In addition, there is no cooling-off period in the law; some politicians have emerged immediately from their political careers as top officials at companies they had been regulating or of consultancies and investment banks in which they essentially engage as lobbyists. Although society has grown less tolerant of conflicts of interest, subtle forms persist and the media are unable to follow every case.

The government of Milos Zeman promised to take a tough line on corruption when it assumed power in 1998. It initiated an anticorruption sweep dubbed "action clean hands" and, responding to pressure from international institutions and foreign investors, adopted an anticorruption program in 1999. The program includes a variety of measures, including the passage of amendments to the Tax Law, laws governing the conduct of the police and judicial proceedings, the Law on Competition, and the Law on Public Tenders. The Ministry of the Interior must present yearly progress reports. Advances in 2002 included the creation of an administrative branch within the judiciary that will specialize in reviewing the decisions of state administrative organs, as well as the passage of an amendment to the Law on Public Tenders that limits the government's ability to bypass public tenders and award a contract to a preselected contractor – a loophole that Mr. Zeman's government used liberally. Some of the government's proposed measures are populist political ploys, notably the notion of requiring citizens whose assets exceed a certain level to declare the origins of their property. These efforts may look reassuring on paper, but judging from polls, press reports, and surveys from organizations like Transparency International, the actual results are elusive.

A new law on political parties entered into force at the beginning of 2001. The law strengthens both the rules for accepting financial contributions and the requirements for declaring financial dealings. Unfortunately the parties decided to resolve the problem of party financing by legislating for themselves large contributions from the state budget. Although this approach might weaken the incentives for corruption, it has drawbacks. Most notably, some observers believe that the financing mechanism might conflict with the Constitution's provision that parties must be separate from the state. The law also contains significant loopholes. For example, it bans contributions from all foreign entities except foundations and political parties. As a result, the CSSD has been able to receive contributions from the ruling parties of Britain and Sweden, the two countries that manufacture the Gripen fighter jet whose purchase the government was pursuing.

So-called functional corruption, which forces citizens and companies to pay bribes to receive regular services in a timely manner, is believed to be widespread. However, most areas in which the free market is allowed to operate are now largely corruption-free. For example, the once widespread need to pay a bribe in order to obtain a telephone line is now a thing of the past in a country where there are as many cell phones as inhabitants. A danger of a different order is the emergence of client networks consisting of state officials and business groups that cooperate in awarding public contracts and influencing regulatory decisions. Czech sociologist Pavol Fric describes this phenomenon as the "corrupt symbiosis of the elites." Unfortunately the government's efforts to tackle this kind of behavior lack credibility since the government itself has engaged in many decisions that lack transparency and invite suspicion of corruption. For example, the year 2002 saw the defeat of the government's attempt to purchase the Gripen fighter jets. The government had repeatedly changed the conditions of the tender so that eventually four out of five contenders withdrew their bids amid accusations of manipulation. The manufacturer of Gripen, the Swedish-British consortium BAE Systems/Saab, offered manufacturing offsets worth 150 percent of the value of the contract – an amount that independent observers found incredible. Eventually, the Senate defeated a bill authorizing the purchase of the jets, and in the wake of the August floods the government shelved the deal.

Another case in 2002 concerned the construction of the D47 highway in Northern Moravia. In 2001, the government awarded the contract to build the highway to a consortium led by a Russian-Israeli company that is under investigation for financial misdeeds in Russia. It did so without issuing a public tender. Following the June 2002 parliamentary elections, the new minister of transportation agreed with the allegations voiced by critics that the contract is disadvantageous to the state and overpriced by an order of tens of billions of Czech korunas. Another case worth mentioning is one involving Karel Srba, a top economic official at the Ministry of Foreign Affairs. Srba, already sacked from the ministry for his role in a suspicious and legally flawed rental of ministry property, was arrested in June and charged with contracting with an assassin for the murder of a journalist. In the course of the investigation, it emerged that Srba was responsible for improperly awarding contracts at the ministry for the combined value of about CZK 200 million (US$6.6 million). Ironically, Srba had also been entrusted with conducting the "clean hands" anticorruption sweep at the Ministry of Foreign Affairs.

The credibility of the government's anticorruption drive also has been undercut by alleged cases of malfeasance by police investigators. Two cases are well documented. In 1999, two top officers from the police's organizedcrime unit were accused of blackmailing a customs officer. In 2001 they were exonerated by a judge who expressed puzzlement at the conduct of the investigation and the quality of the evidence presented. In another case, the commander of a special police anticorruption unit that investigated bank fraud and corrupt practices in the financing of political parties was charged in 1999 with revealing state secrets. The commander received a disciplinary punishment that prevented him from remaining in his job, but the criminal charge against him was later dismissed when it turned out that the evidence had been tampered with. The culprits, however, were never found. The new government of Prime Minister Vladimir Spidla has shown signs of improvement. Spidla made it clear before the 2002 elections that he would not work with one of Zeman's advisers – a former Communist official widely believed to be both a conduit for corrupt practices and a security risk. After the election, all members of the new government published declarations of their property and financial assets. Some ministers even took steps to stop conspicuously ineffective projects and dissolve client networks. As for the more mundane "functional corruption," the prospects are mixed. The government's efforts in this could be offset by the proliferation of bureaucratic regulations in fields such as public hygiene and trade licensing that spread owing in part to the harmonization of Czech law with EU regulations and in part to the government's ideological bent.

In a survey conducted by the market research firm GfK Czech Republic, a third of all respondents reported experiencing bribery as a party of everyday life. Almost a fifth admitted that they had offered bribes. More than 52 percent of the respondents agreed that the Czech Republic is a corrupt state – a figure that is above average in comparison with other Central European states. The acceptance of corruption and the sentiment that opposing it is futile are on the rise. The Czech Republic's performance in Transparency International's annual Corruption Perceptions Index has worsened in recent years, dropping from 39th place in 1999 to 52nd place in 2002.

Author

Martin Weiss is a journalist living in Prague.