Communists stage a comeback in former Soviet-bloc country Czech Republic

Czech anti-establishment billionaire Andrej Babis speaks at a joint news conference at the Chancellery in Berlin, Germany, on Sept 5, 2018.
Czech anti-establishment billionaire Andrej Babis speaks at a joint news conference at the Chancellery in Berlin, Germany, on Sept 5, 2018.PHOTO: EPA-EFE

PRAGUE (BLOOMBERG) - Europe's political order may have been upset by the new wave of nationalism, but in the Czech Republic the old guard is making a comeback.

As populist forces disrupt traditional party order from Italy to now Sweden, Czech anti-establishment billionaire Andrej Babis needed the support of the communists to win a confidence vote in July. That gave them the biggest influence on power since the collapse of regimes across Eastern Europe in 1989.

Less than three months since the unexpected Czech political twist, the communists are already counting the fruit of their work. Vojtech Filip, the party's longest serving post-revolution chairman, took credit for a boost to the income of Czech pensioners and said negotiations on raising public and minimum wages are on track.

"The neo-liberal model has run into a crisis," Filip said in an interview in his office in Prague. "The most appealing part of our programme is social justice, which doesn't exist here. There has been a significant widening of the gap between the richest and the masses."

Since the shift to democracy, the Czech Republic set off on a painful political and economic transformation that earned it membership in Nato and the European Union. It's now richer than some older member states like Portugal and Greece.

Babis, whose food, chemical and media empire spans 18 countries on four continents, was the first to get their open support after he struggled for months to form a Cabinet after winning general elections nearly a year ago.

In the end, the Social Democrats joined his government despite an ongoing fraud investigation against him. He denies all allegations.

Still, he needed the communists to win a confidence vote for his two-party minority cabinet. That put him under opposition and public pressure as Czechs protested against what they said was legitimising the Communists Party by the premier. The premier argued the partnership was only a one-off deal meant to end the political deadlock. Previously, the Communists were shunned by all governments.

For their part, the Communists believe they have a sway over the government in a number of issues, including the outcome of the budget that Babis wants to push through parliament.

Filip said his party will back the 2019 budget in parliament only if the Cabinet sticks with the deal. Going forward, he said the party will use its right to reject those budget proposals that it won't "find it suitable".

Early days of their loose parliamentary alliance show the government is committed to fulfilling the conditions set in their "tolerance agreement," Filip said.

Foreign policy will be a bone of contention. While Babis is staunchly pro-Nato, Filip's party has clashed with previous governments over its favouritism towards Russia and calls for the alliance's end.

Filip has already said his party won't back plans to send more troops to foreign missions.

"In this aspect, the government can't expect our support," he said. "We don't want Nato decisions to drag us into problems that we didn't cause and want no part of."