1st March 2022

CEC Group Inside Report - March 1

  • Minister of Interior Vit Rakusan (STAN) announced that the Czech Republic halts issuing entry visas to the citizens of the Russian Federation. According to a source from the foreign ministry, Czechs were pushing this measure together with other countries to be adopted EU‑wide, but so far the EU decided against it. The same source informs that the behind‑the‑scenes discussions within the EU on the Russian invasion have been marked by a remarkable consensus. “Initially, the Hungarian representatives were trying to cause difficulties, but they eventually fell into line on sanctions,” says the same source. Under Prime Minister Viktor Orban, Hungarian business ties with Moscow have been significantly strengthened.
  • Parliament will start the second reading of the state budget this week. According to a public affairs adviser close to Parliament leadership, it is expected that the chapter on labor and social affairs will have to be redrafted due to a looming increase in energy poverty, as well as the trade and industry chapter owing to the expected increases in energy prices and the possible lack of natural gas supply to Europe.
  • So far, the presidential election campaign has been marked by low intensity. There is a consensus among several observers that the dramatic changes in the international security architecture connected to the war in Ukraine will favor general (ret.) Petr Pavel, former Chief of the Army Staff and Chairman of NATO’s Political Committee. Pavel was a member of the Communist Party and military counterintelligence in the late 1980s, which is his key weakness among educated elites and the right‑of‑the‑center voters, but the current crisis will favor his expertise and experience. Pavel has been very active on social media in recent days with, a wide following. “It is his for the taking. If he does not make an egregious error, he will likely be the next president,” says an experienced campaign consultant working for one of Pavel’s opponents.
  • A well‑informed source says that Ivan Gabal, a sociologist and former MP, is organizing a citizen’s initiative aimed at forcing President Milos Zeman to give an unequivocal address on the war in Ukraine or resign. The initiative would potentially foresee early presidential elections in June. There is a next‑to‑zero chance Zeman would voluntarily resign, baring health complications, but the initiative would highlight the longstanding pro‑Russian policies Zeman has been pushing and put Pavel in the best possible light, says the source.
  • Principal advisers to President Milos Zeman are searching for a presidential candidate who would be campaigning as Zeman’s anointed successor, says a well‑informed lawyer and lobbyist. They have been trying to persuade Jiri Rusnok, Governor of Czech Central Bank, to run for the presidency, but with no apparent success. According to a different source with good knowledge of the financial scene, Rusnok, whose term is up in several months, does not believe he has a chance and has no appetite for politics.
  • Lobbying to succeed Rusnok as CNB governor is in full swing. Some media published news that Ales Michl, a member of the CNB board, is a favorite, but a well‑placed insider disagrees, saying these reports might be a public relations offensive instigated by Michl himself, who used to be a journalist and knows how to manipulate the media. According to the source, the fact that Michl, together with another board member Oldrich Dedek, has been a dissenting voice on the issue of strict monetary policy to tame inflation, will be held against him by Fiala’s government. The name of Economic Chamber President Vladimir Dlouhy as the Rusnok successor has been floating around but two well‑informed sources say that Dlouhy is not under consideration. One of the sources says that the two most likely candidates to replace Rusnok are his current deputies Tomas Nidetzky and Marek Mora.
  • Minister of Agriculture Zdenek Nekula (KDU-CSL) has not appointed a new General Director of Lesy Ceske republiky (the state Forestry Company) but opted instead for a public tender which he will launch in several weeks. In the meantime, the company will be led by the Interim Director Jiri Groda of the Forestry Administration Vitkov in the Opava region.

Jan Martinek, owner of CEC Partners Holding LLP, registered in London (and listed as a dormant account), a consultancy with no relationship to our CEC Group, wrote a letter on February 25 to Renata Kellnerova, the majority owner of PPF, in which he demanded that PPF stop its financial support for the Institute of Vaclav Klaus. According to Martinek, Klaus has been for years a supporter of Vladimir Putin, apologist for the Kremlin regime and amplifier of its propaganda and disinformation tactics. Martinek, who used to work for Nomura Czech Republic, appealed to Kellnerova’s sense of civic duty. In his letter, he stated that the Hanspaulka Chateau, where Klaus houses his institute, would be much better used by, for example, housing Ukrainian refugees.

Members of the American Chamber of Commerce in the Czech Republic