Czechs Get New Cabinet Pledging to Fight Covid and Inflation

(Bloomberg) -- A new government took power in the Czech Republic, pledging to trim spending, raise vaccination rates and address soaring energy prices as it ends seven years of political dominance of a former billionaire premier. 

The cabinet of Petr Fiala, the leader of the five-party coalition’s strongest member, was appointed by President Milos Zeman on Friday.

“We aren’t starting in an easy situation,” Fiala said after the ceremony. “Our country, our citizens are facing enormous problems, among them Covid, energy prices and inflation.”  

The arrival of the new coalition puts an end to a period in which the country of 10.7 million clashed with fellow European Union members under former Premier Andrej Babis. The tycoon faces accusations of criminal fraud at home and conflict-of-interest from Brussels because his companies receive funds from the bloc.

But the power change doesn’t represent a complete about-face in the Czechs’ relationship with more liberal-led EU members. 

The conservative-to-leftist mix of parties in the coalition differ over stances ranging from ties with bloc’s rebels Poland and Hungary and social issues including same-sex marriage to how and when to meet the EU’s environmental goals.

Czech vaccination rates, meanwhile, lag western peers, and the country has ranked among the world’s most-deadly places for Covid-19 during different waves of the pandemic. The new cabinet wants to fight the pandemic with measures targeted on regional hot spots, without blanket lockdowns or harsh restrictions on unvaccinated people.

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Fiala, a former dean of the country’ second largest university, campaigned mainly on the promise to oust Babis and reverse his fiscal policies. 

He said his predecessor had driven up public debt and fueled inflation with unprecedented spending to raise wages of teachers, doctors and other public workers, as well as increasing pensions and providing cash relief to business hit by the pandemic-induced lockdowns. 

The coalition has pledged to slash 2022 state budget deficit to around 300 billion koruna ($13.5 billion), from the previous administration’s plan of 377 billion koruna. 

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