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Grayling Political Digest, November 2017

1st December 2017

Post-election hangover

Following his crushing victory in October’s elections, Andrej Babiš is trying to resolve his pyrrhic victory by forming a minority, unicolour government. For the Czech political system, this very unusual situation will result in an unstable government standing on 78 MPs and relying on ad-hoc coalitions. However, as Andrej Babiš is tainted by his scandals, other parties are reluctant to associate their brand with his name. Mr Babiš is now putting together a list of ministers comprising ANO’s old hands and “experts” in an attempt to give the impression of a “government of experts”, a concept resonating with the public. Meanwhile, President Miloš Zeman has confirmed his almost unconditional support for Mr Babiš and is determined to help him to become the Prime Minister. In return, ANO will not put up a strong rival to Mr Zeman in the presidential elections this coming January.


Contracts register - a truly never-ending story

Welcome to the new parliamentary term and, first up on the agenda, you guessed it – the controversial transparency law on the contracts register. We realise we have reported on developments surrounding the last amendment to this legislative act several times, but, besides the painful and protracted approval process, 32 MP amendments and cross-party deals, there’s another issue at hand.

We might have expected such controversial legislation to provoke at least one petition to the Constitutional Court for its annulment, and in the past month we have not been disappointed. While the petition, signed by 30 senators, is hardly a surprise, what is staggering is that it was written by a legal representative of a company openly critical of the legislation – Budweiser Budvar. What is more, the document itself omits to mention certain key arguments about the legislation, and instead is based on rather controversial studies, as noted by the anti-corruption website


Christmas at stake? 

Less than a month separates us from the most-popular shopping spree of the whole year – the Christmas season. As e-commerce’s share grows, with more and more people choosing presents for their loved ones online, there has been a significant increase in demand for postal services.

Most of us would be very worried if the largest state-owned operator of postal services were unable to deliver parcels and smoothly operate its standard services. Just recently, however, the Czech Telecommunication Office (CTO) denied the state-owned company Czech Post its licence for the next five years. 

The main reason being that the company did not correctly meet the requirements of the tender because it failed to submit cost calculations for its services. The company notes that it would have to hike up the price of its services by over 50%. Thankfully, the CTO will order Czech Post to provide its services under current conditions in the coming year.


Not all public companies are equal 

It is common knowledge among experts and the public that, if you operate a public company, you must comply with the obligations and regulations set out in the Public Procurement Act. However, according to a recent verdict by the Regional Court in Brno could change this. The unexpected outcome of a legal dispute between the Research Institute of Czech Railways and the Office for the Protection of Competition may have a significant impact on how we assess activities in the “public interest” and what can be considered a purely standard commercial activity. The Research Institute’s main argument is that, despite being a state-owned company, its activities are purely commercial and therefore the Institute does not have to comply with public procurement legislation. A final ruling has yet to be handed down by the Supreme Administrative Court.


From Russia with love

According to the latest Security Information Service’s annual report, Russian espionage is still rife and frequently practised online. As witnessed during the presidential elections in the United States and France, Russia is using cyberspace very actively to obtain valuable information and exert influence beyond its state borders.

The report specifically mentions the Russian cyber espionage campaign APT28/Sofacy, aimed at the theft of data and personal details. Specific targets have included the Czech military research agency and several people with ties to the military.

The report also mentions several activities by Czech hacker groups, predominantly focused on the vulnerable spots of state administration bodies, e.g. the Visapoint website run by the Ministry of Foreign Affairs. The full report is also available in English.

Grayling Team

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