EUROPE: CEE PULSE

The Czech government is struggling to cope with the resurgent pandemic and criticism over slow vaccination progress. In Latvia, Prime Minister Krisjanis Karins has requested the resignation of the heath minister over shortcomings in the vaccination plan. Poland’s vaccination campaign is being challenged by reports of well-known public figures getting inoculated before being eligible. Besides Covid-19, opposition parties in Sloveniaplan to table a motion of no confidence in Janez Jansa’s government in mid-January, while Romania’s new government is focusing on fiscal consolidation. Czech Republic The country once again leads in Europe in terms of new infections per capita over the seven-day period, and the share of positive tests averages above 40%. Hospital bed capacity for Covid-19 patients stands around 20-30%, but the number of hospitalizations has increased by 52% during the past ten days. All the country’s regions remain under the most severe (level 5) restrictions which are valid until 10 January and are likely to be extended. As in most CEE countries, vaccination is proceeding slowly due to the shortage of vaccines. Prime Minister Andrej Babis blamed EU institutions for slow approval and procurement of vaccines. In the meantime, the government on 4 January approved additional support measures for businesses that were forced to suspend their operations. The new measure will provide businesses CZK 400 (EUR 15) per employee for each day of closure. The measure – estimated to cost the budget CZK 6bn (EUR 229mn) – will apply retroactively from 14 October until the expiration of restrictions (currently 10 January). Latvia Yesterday, 5 January, Prime Minister Krisjanis Karins (New Unity) requested the resignation of the health minister Ilze Vinkele, a senior member of the second-largest governing coalition party Development/For! (AP!), over shortcomings in the country’s Covid-19 vaccination plan. The move is raising tension in the fragile five-party coalition government, but AP! might be reluctant to destabilize the cabinet amid the pandemic. If, nonetheless, AP! decides to leave the government over Vinkele’s dismissal, the most likely scenario would be a minority cabinet led Karins, at least until the pandemic subsides. Meanwhile, a populist deputy Aldis Gobzems (independent) is seeking to capitalize on the growing public disappointment in authorities and rising fatigue with the pandemic-related restrictions. He is set to register a new populist party later this month (possibly called the Gobzems Party), which could become a serious contender in the 2022 parliamentary election. Poland Reports that several well-known public figures (including actors and politicians) had been inoculated earlier than being eligible are casting doubts about the integrity of the Covid-19 vaccination process. Authorities have launched an inquiry into the matter and dismissed one member from the ruling Law and Justice (PiS) party for getting vaccinated before being eligible. According to the country’s vaccination strategy, only healthcare workers can be vaccinated at this point. Starting 25 January, the eligibility will be expanded to include the elderly (60+y), teachers, members of uniformed services and residents of nursing homes. Registration for vaccination for people from other groups will start on 15 January, although the exact timeframe for mass vaccination remains unclear. To encourage vaccination, the government is setting up a special fund to compensate for any negative side effects associated with inoculation and is considering lifting some restrictions for those vaccinated. As of 5 January, around 100K of the country’s citizens (0.2% of the total population) have received at least the first dose. Romania The recently approved government led by Florin Citu (National Liberal Party, PNL) plans to adopt the 2021 budget in late January or early February. Until then, public spending will be restricted to one-twelfth per month of the 2020 expenditure. The government targets a deficit of 7% of GDP in 2021 and has already suspended the previously planned hikes in public sector salaries, pensions and child allowances, although some smaller-scale increases are likely later in the year. Fiscal consolidation and attempts to improve tax collection will be one of the top priorities of the Citu government, along with the vaccination campaign, which is proceeding slowly. Slovenia Five opposition parties united under a banner of Constitutional Arch Coalition (KUL) plan to table a motion of no confidence in the Janez Jansa’s (Slovenian Democratic Party, SDS) government on 15 January, according to Karl Erjavec, the leader of the Democratic Party of Pensioners of Slovenia (DeSUS) and a potential new prime minister. The five opposition parties hold 43 mandates in the 90-seat parliament but expect to win support from some deputies from the ruling camp in a secret ballot to approve a new prime minister designate (Erjavec), likely in the second half of January. Even if the motion were to fail, opposition parties are likely to continue challenging Jansa’s cabinet throughout the year.

January 6, 2021

Europe

EUROPE: CEE PULSE

BY Andrius Tursa

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EUROPE: CEE PULSE