- Czech premier clashes with billionaire finance minister
- Government crisis may derail bills tightening regulations
The Czech Republic is once again in political turmoil, and that may just be all right — as far as the country’s largest companies are concerned.
The government, the sixth in the past decade, has been rocked by a fight between Premier Bohuslav Sobotka and billionaire Finance Minister Andrej Babis. The spat is paralyzing the legislative process and may thwart a regulatory crackdown on the most profitable companies like phone operator O2 Czech Republic AS and Komercni Banka AS. Bills designed to make mobile-phone services cheaper and curb risk-taking by banks may not be approved before October general elections, according to the Patria Finance AS brokerage in Prague.
Sobotka’s Social Democrats are trying to stem a drop in popularity and reduce Babis’s wide lead in opinion polls. The premier, who plans to tax banks and rich people more if he wins again in the ballot, outlined in March the fast-track adoption of a law boosting competition in telecommunications and allowing the regulator to impose higher fines on operators. That’s now less likely to pass in the fragmented parliament, which is also delaying the approval of a central bank proposal to impose stricter rules for mortgages.
“The political instability is, paradoxically, a welcome development for those investors who were concerned there could be too much regulatory tightening too soon,” Patria analyst Ondrej Konak said by phone. “If these new rules are adopted only after the elections, they may be more business-friendly as lawmakers…