Pehe: Pension reform may be masterpiece among giant thefts

Prague, Feb 12 (CTK) - A partial privatisation of the pension system, planned by the Czech cabinet, may be a masterpiece among the large-scale thefts known as "tunnelling," which started in the country in the 1990s and have continued since, gradually undermining Czech economy and democracy, daily Pravo writes Saturday.

Commentator Jiri Pehe discusses what he calls the widespread and swelling practice of tunnelling, or illegal siphoning of assets from companies, often by their managements.

Many believe that the biggest cases of tunnelling are over along with the "wild privatisation" period of the 1990s. However, the planned transfer of tens of billions of crowns from the state pay-as-you-go pension system to private funds, accompanied by people's compulsory savings in the funds, may be the biggest ever tunnel in the Czech Republic's history, Pehe writes.

The government asserts a part of the pension system must be privatised as "already yesterday it was too late."

This rash promotion of the plan reminds of the early 1990s when, too, completely different intentions hid behind neo-liberal rhetoric, Pehe writes.

As a result, the costs of the Czech economic transformation climbed up to some 700 billion crowns, according to a government report from 2005, he says.

That period ended by the collapse of Vaclav Klaus's right-wing cabinet after it turned out that "tunnels" had brought dubious money from remote areas such as Hong Kong and Mauritius to the coffers of the then Klaus-led senior ruling Civic Democratic Party (ODS), Pehe writes, alluding to the then scandal over the ODS's controversial funding.

However, Klaus was a capable strategist who transformed his party's defeat into a political tunnel when he and the rival Social Democrat (CSSD) chairman Milos Zeman struck the "opposition agreement," or a power-sharing pact between the CSSD as the governing and the ODS as the main opposition party, Pehe writes.

Stripped of its content, the "tunnelled" democracy then laid foundations for further tunnelling activities that are still effective, Pehe writes.

He says the ODS and the CSSD have divided powers in Prague in the past years, including the period of 2006-2010 when the ODS officially ruled the city alone.

The Prague ODS has successfully applied its experiences with tunnelling to hugely overprice the city road bypass as well as the Opencard project of a smart card for Praguers, Pehe writes.

Another tunnel is the city's contract for the construction of the Blanka tunnel that is to facilitate transit through the city. The contract was simply botched on the city's part, which enabled the tunnel to be tunnelled by raising its price by 10 billion crowns, Pehe writes with irony.

A possible tunnelling of the planned construction of a new sewage treatment plant in Prague evidently seems to be another attractive opportunity for tunnelling, though the first attempt in this respect was thwarted by a ministerial official, Pehe writes.

He refers to a scandal that broke out at the Environment Ministry last December over secret recordings showing that the construction order was to be manipulated to bring money to the ODS and then environment minister Pavel Drobil, ODS deputy head.

Strange manoeuvres have been made around the ongoing giant tender for the removal of the old environmental damage, worth a hundred billion crowns.

Tunnelling has also unexpectedly affected some areas outside economy. Some Czech universities have been tunnelled, as well as parts of the judiciary, though the court recently forbade to call these parts "judicial mafia," Pehe writes in an ironical allusion to recent scandals.

The state annually loses more than 100 billion crowns that flow away through tunnels, he says.

Even politics and history have been subjected to tunnelling. President Klaus says, for example, that it is not dissidents such as Vaclav Havel, but the mass of summer cottage owners among Czechs who helped topple the communist regime [by their persistent passiveness], Pehe writes.

In view of the agile tunnelling of everything that should keep the democratic state and market economy together, the Czech Republic, full of tunnels, could collapse one day, Pehe concludes.