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INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 PRAGUE 000016 
 
SIPDIS 
 
E.O. 12958: DECL: 01/11/2020 
TAGS: PGOV PREL EZ
SUBJECT: ZEMAN OUT OF RETIREMENT, OFFERING LEFT WING 
ALTERNATIVE 
 
Classified By: CDA Mary Thompson-Jones for reasons 1.4(b) and (d) 
 
¶1.  (C) Summary:  Former Social Democrat (CSSD) Prime 
Minister Milos Zeman (65) announced in early January that he 
will reenter politics and run for parliament under the Party 
of Citizens' Rights (SPO).  Zeman has chosen the Ustecky 
Region in North Bohemia, where current CSSD Chairman Jiri 
Paroubek is running.  Zeman was the former Chairman of CSSD 
but left the party in 2007 after clashing with Paroubek. 
Zeman retired from politics in 2003 after losing his bid for 
the Czech Presidency to Vaclav Klaus.  The SPO was recently 
founded to facilitate Zeman's bid for election.  Parties must 
gain at least five percent of the vote to make it into 
parliament, and the recent emergence of the new TOP 09 party 
as a right-of-center alternative to the Civic Democrats (ODS) 
may have given SPO inspiration to provide an outlet for 
disgruntled left-of-center voters.  Though SPO recently 
polled at 3.3 percent, it is still unclear what, if any, 
impact Zeman and SPO will have on the parliamentary elections 
tentatively scheduled for May 28-29.  CSSD is the party that 
loses the most by SPO's emergence, as it would be a logical 
choice for disgruntled CSSD voters, but Zeman will have 
difficulty appealing to younger voters.  End Summary. 
 
------------------ 
Political Dinosaur 
------------------ 
 
¶2.  (SBU) Milos Zeman is an economist by training, having 
studied at the Vysoka Skola Economicka (University of 
Economics, Prague).  Although he opposed to the 1968 Prague 
Spring invasion, he did not take an active role in the 
dissident movement and during the normalization period was 
allowed to pursue a professional economic career.  While 
obscure publicly, he was a known entity within academic 
economic circles.  In 1984, he began working as a government 
economist in the forecasting department and shortly before 
the Velvet Revolution published a paper on the future of the 
Czechoslovak economy that was viewed as critical of the 
government.  The timing of the publication was propitious, as 
it brought him notoriety just prior to the Revolution. 
 
¶3.  (SBU) After the Velvet Revolution, Zeman utilized his 
new-found notoriety and became active in the left-of-center 
camp of the Civic Forum (OF), quickly realizing that an 
opposition party was viable as a counter to Vaclav Klaus and 
the right-of-center Civic Democrat party (ODS) that Klaus 
founded in 1991 after the OF dissolved.  Zeman saw the Social 
Democrat Party (CSSD), a long-established but weak, 
inconsequential and (most importantly) leaderless party, as 
his best opportunity to gain power.  He is widely 
acknowledged to have pulled CSSD from obscurity and 
transformed it into a major political party.  He served as 
CSSD chairman from 1993 to 2001, at which time he was 
succeeded by Vladimir Spidla.  Zeman was first elected to the 
parliament in 1996 and was speaker of the Chamber of Deputies 
from 1996 to 1998.  After the 1998 parliamentary elections, 
he became Prime Minister and served as PM until 2002.  He 
fully retired from politics following his failed Presidential 
bid in 2003. 
 
¶4.  (C) Zeman is not viewed as corrupt but likes power.  He 
is often described as a smart politician who handles the 
press well because of his biting wit and sharp speech.  He is 
not an ideologue and is very pragmatic.  His ability to 
quickly cut an opposition agreement with Vaclav Klaus, with 
whom he has acrimonious relations, after the 1998 
parliamentary elections is often cited as an example of Zeman 
putting practicality over politics.  He ran for President in 
2003 against Klaus and lost.  His defeat is attributed to his 
loss of support within CSSD.  After anointing Vladimir Spidla 
as his successor, Zeman was accused of backroom manipulation 
of the party after Spidla proposed eliminating the spheres of 
influence that CSSD and ODS had developed within the 
governmental ministries as a result of the opposition 
agreement in 1998.  These "spheres of influence" that 
developed after the opposition agreement continue today and 
are often cited as a cause of the Czech Republic's corruption 
problem.  Spidla told an Embassy contact directly that he 
initially supported Zeman's bid for the Presidency 2003 but 
then withdrew it after Zeman "turned against him."  Zeman's 
flagging support among CSSD members allowed Klaus to garner 
enough parliamentary votes to win the election, an election 
many thought Zeman could have won had he been more forthright 
about his presidential ambitions. 
 
----------------------------- 
The Party of Citizens' Rights 
----------------------------- 
 
¶5.  (C) The Party of Citizen's Rights (SPO) was established 
in October 2009 and registered in December.  The party was 
 
PRAGUE 00000016  002 OF 002 
 
 
established by the "friends of Zeman" and is comprised of 
some former ministers from Zeman's cabinet and other 
businessmen.  One of these, Miroslav Slouf (62), is a 
high-powered lobbyist/deal-maker who exerted significant 
control in the CSSD ranks.  Slouf has been on the outs lately 
with CSSD leaders and may see SPO as a way to maintain his 
access in government and pay back Paroubek for limiting his 
access.  Slouf has also been connected to Russian sources of 
financing (Lukoil, a Russian-owned oil company is one of his 
major clients) as well as the intelligence services, which 
could haunt Zeman later on if his candidacy becomes serious. 
In addition, Frantisek Cuba (73), a former Czechoslovak 
Communist Party member and chairman of a agricultural 
cooperative under the communist regime, joined SPO and is 
backing Zeman.  This connection could also haunt Zeman. 
 
¶6.  (C) Zeman's motivation for reentering politics is 
unclear.  During a news conference on January 4, he said that 
Jiri Paroubek's previous comment calling him (Zeman) a 
"coward" for not running was the last straw that made him 
run.  It is hard to believe that Zeman would reenter politics 
after a 7-year hiatus on a dare.  One analyst suggested to 
Poloff that some of Zeman's "friends" - notably Slouf - may 
be driving this.   More likely, another leading political 
scientist noted, it is personality driven.  Zeman likes 
politics, loves power and often sees himself in a messianic 
role.  His desire to save the republic from what he views as 
incompetent politicians, combined with his dislike for 
Paroubek, may explain his decision to wade again into the 
political waters. 
 
¶7.  (C) According to Zeman, the SPO should push for direct 
democracy, greater Czech involvement in foreign 
anti-terrorist missions, progressive taxation and other 
unspecified luxury taxes.  SPO would also reject patient 
health care fees and tuition fees. Financing will not be an 
issue.  If SPO can maintain momentum and inch closer to the 
five percent voter threshold for entering parliament, Slouf 
and the other "friends" will ensure a steady stream of 
donations. On January 11, MP Kosta Dimitrov defected from 
CSSD and joined SPO.  Dimitrov is a relatively unknown MP. 
Zeman said up to seven additional parliamentarians could do 
so as well, most notably Karel Splichal.  Jiri Paroubek 
called this "an act of a desperate man." 
 
------------------ 
Chances of Success 
------------------ 
 
¶8.  (C) Comment:  Frustration with Czech politicians is 
running high.  According to a recent STEM poll, only 24 
percent of Czechs are happy with the political situations. 
TOP 09 has presented itself as a right-of-center alternative 
to ODS, but has made clear that it is a natural coalition 
partner with ODS.  TOP 09 Chairman Karel Schwarzenberg 
reiterated this point in his speech at the ODS program 
congress in November.  SPO is presenting itself as a 
left-of-center alternative to CSSD, but may find it difficult 
to be a coalition partner with CSSD even if SPO makes it into 
parliament, since Zeman and Paroubek are publicly attacking 
each other. 
 
¶9.  (C) Comment Continued.  Opinions vary on Zeman's and 
SPO's potential success.  In another recent STEM poll, Zeman 
had a 51 percent approval rating (the same, ironically, as 
TOP 09 Chairman Karel Schwarzenberg).  While Zeman is a 
somewhat popular figure with older voters, his message and 
persona do not resonate with the younger crowd.  A popular 
political editor for daily newspaper said Zeman and SPO have 
a chance of making it into parliament because of his 
political battle with Paroubek.  Privately, however, other 
political analysts have called Zeman's announcement a 
"tempest in a teapot", predicting Zeman's bid will fizzle in 
a few weeks under closer scrutiny.  The defection of CSSD MP 
shows Zeman is actively working behind the scenes to shore up 
support.  But, as an aging former CSSD head, he will find it 
difficult to attract many other CSSD members who are looking 
to the future (not the past) for solutions.   End Comment. 
Thompson-Jones