Prague, Oct 25 (CTK) – The Czech Social Democrats (CSSD) have total debts of 0.5 billion crowns and their financial support from the state will drastically decrease due to their debacle in the weekend general election, therefore they will have to take severe cost-saving measures, Lidove noviny (LN) wrote on Wednesday.
The CSSD, senior member of the outgoing coalition government with ANO and the Christian Democrats (KDU-CSL), gained mere 7.3 percent in the October 20-21 election, compared to 20.5 percent four years ago, and its deputy group shrank from 50 to 15 members.
LN writes that the CSSD lost 648,000 voters and 35 MPs, which means a loss of roughly 183 million crowns in state subsidies for mandates for a four-year tenure.
Moreover, the party faces an obligation of 337 million crowns it owes to lawyer Zdenek Altner, respectively to his heirs most probably, since the lawyer died last year.
Altner helped the CSSD win the ownership of the Lidovy dum lucrative real estate in Prague centre in the late 1990s. The contract from 1997 granted him a reward worth 10 percent of the real estate’s value, but the party refused to pay him the whole sum.. Altner eventually won a long court dispute with the CSSD that was ordered to pay him both the reward for his services and an exorbitant contractual fine for a delay.
The CSSD sought an out-of-court settlement of the debt to Altner, but in vain.
LN writes that the CSSD vouches with the Lidovy dum seat and other buildings for other debts that last year amounted to almost 258 million crowns. Consequently, including the money it should pay to Altner’s family, the party has total debts of almost 0.5 billion crowns.
LN says the CSSD launched the first wave of austerity measures last year in view of the lost dispute with Altner, and it cut money for salaries as well as the election campaign. However, the savings were only minor.
Last year, the CSSD spent 58 million crowns on salaries, while a year before it was 66.7 million. Moreover, former CSSD leader and PM Bohuslav Sobotka refused to drastically cut expenditures on the campaign before the general election. In the end, the party spent almost the entire 90-million-crown legal limit on the campaign, but this did not bring the expected voter support and subsequently money, LN says.
The CSSD must therefore take more severe measures, it adds.
LN writes that the right-wing Civic Democrats (ODS) went through a similar crisis in 2013 when their election result dropped to a one-digit figure and they lost even more MPs (37) than the CSSD, while now they won 11.3 percent and fared second.
However, unlike the ODS, the CSSD could never rely on support from firms and its financial situation is strongly dependent on contributions from the state and gifts from its rich and grateful members. Naturally, mainly those filling high posts are sending more money to their mother party. However, the number of Social Democrats filling such posts in the Chamber of Deputies and elsewhere will decrease after the election rout, LN says.
It writes that the CSSD could learn a lesson from the ODS, which did not have so high debts, however. In reaction to its loss of support, the ODS quickly moved its headquarters from large lucrative offices to a more modest building and it did not hesitate to cancel the posts of regional managers and dismiss other staff either, the paper adds.
It admits that banks are still willing to provide loans for the CSSD thanks to its expensive real estate it can use as a guarantee, but the prospects of the party are uncertain.
The results in the local and Senate elections to be held next year and the regional election scheduled for 2020 will play a key role in the CSSD’s future. If its voter support kept plummeting, the inflow of finances to the party along with its self-confidence would decline, LN writes.
