The fatal social democratic irony

Czech social democratic party (ČSSD) promised aids to small enterprises, but instead absolves from taxes big corporations. Meanwhile certain urea producer is escaping their reach.

„I am an adult boy, a student and a socialist, who believes in himself, in iron inventions and good Lord Jesus Christ,“ wrote poet Jiri Wolker (1900-1924) almost a century ago. In the meantime, the word „socialism“ left a bad taste of forced collectivization, central management and monstrously huge state moloch ruling Czechoslovakia in 1948-1989. The totalitarian power closed the borders, because people were runing from it. However, Wolker did not praise delusions of grandeur, but humility. „I will become smaller and smaller, till I get the smallest in the whole world. In the morning, in meadow, in summer I´ll reach for the smallest little bloom. I´ll whisper when we´ll embrace: My little boy barefoot, the heavens palm leaned on you by a drop of dew, so it may not fall.“ The present Europian and Czech socialists reach to the small and the economy leans on them, so it may not fall.

The Party of Europian socialists is presided by Martin Schulz who considers small and medium enterprises the backbone of the economy. He recalls his bookshop he had been running in his home town before he entered political career. „My proudest day was the first day when I turned the key of the front door to open that bussiness. Twelve years later, I passed off this bookshop to one of my employees. That gave me pride – in the business we had built and the business that would go on. This bookshop is still existing,“ says Schultz (min. 16:00).

The Czech social democratic party won the last elections with the following programme. „It is necessary to support the development of small and medium enterprises that have been an unused reserve of growth and employment, especially in small industry. These entities will have more opportunities from public contracts and they will gain support in the development of new technologies. The means to this will be provided by the development of the Czecho-moravian surety and development bank (Českomoravská záruční a rozvojová banka). This 100% state owned institution will become a strong universal commercial bank that will finance small and medium enterprises in particular,“ promised the ČSSD (chapter 2, Economics, subchapter Strenghtening the competitiveness of our country).

The truth is contrary

The end of idealistic dreams. The government lead by the social democrats has been through the first six months. Lets sum it up in a little story. In the town of Prostějov, there lives a skilfull seamstress who lacks the capital to start her own business. She needs business premises, machinery and textile. She was in for the social democratic programme because she considered a credit on good conditions from the state bank as a brilliant solution. However, social democrats somewhat rethought their promises and the seamstress is suddenly out of luck. There aren´t any news from the Czecho-moravian surety and developemnt bank, because the government decided to build its economic policy on investment incentives. Public support thus belongs to those who have big capital, as illustrated by the internet calculator of the CzechInvest agency. Even if the seamstress sells all she has, it won´t help her. For to be eligible for an invesment incentive she would have to rise 100 million CZK! There is no other choice for the woman than to work in a factory of a global corporation which will get a tax relief of 30 million for invested 100 millions CZK. The employed woman naturally bears the tax burden in its entirety as well as the rest of the middle and lower class.

In the period from January to July 2014, social democrats granted investment incentives to 84 foreign and 52 Czech companies. The Prime Minister Bohuslav Sobotka believes that the economy was started up and that the unemployment rate is going to decrease. Such a claim is incomplete if we don´t know what exactly people do and for whom they work. Longterm tendencies can be deduced from the list of present investment incentives beginning back in 1998 when Milos Zeman used to be the Prime Minister (file „Udělené investiční pobídky“). Among the favoured companies there is e.g. the publishing house MAFRA, a.s. ( in 2002, 55 created jobs, maximum public funding 435 millions CZK), Agroetanol TTD, a.s. (ceased to exist, in 2006, 42 jobs, 445 millions CZK) or the producer of biofuels PREOL, a.s. (in 2007, 72 jobs, 611 millions CZK). What a fatal irony! The present owner of Mafra and Preol is noone else than Andrej Babiš, the Minister of finance in coalition with social democrats whose party ANO has been growing in popularity according to the latest opinion polls.

ČSSD has been creating a system not suitable for the small, although the party itself has much smaller budget than one Babiš´ urea factory. The self-destructive disharmony of promises and deeds squeaks louder and louder. The socialist ministers are persuading rich foreigners to relocate because of our tax reliefs, while the socialist deputies criticize the tennis player Petra Kvitova because she moved to get tax relief. Meanwhile, the sold journalists flatter industrial and media mogul who is heading towards autocracy: „How is it that you are so good?“ The present power isn´t at least like the old, the totalitarian one. It doesn´t close the borders. For the power itself doesn´t have any roots and can exchange the politics for another business right away, or it may move to the far side of the planet. But the woman who was promised a support for her own business and who works in a favoured factory of an international corporation might feel a little bit of injustice, of central management and something too big, something against which she is defenseless and helpless.

(The author is a member of ČSSD)$

published: 7. 9. 2014

Datum publikace:
7. 9. 2014
Autor článku:
Petr Woff