Red Wedding

The clusterfuck is complete. There will be a bloodbath.

(Jaša L. Zlobec, 1993)

20140423 blog Red Wedding

One wonders how the late Jaša L. Zlobec would have commented the current political situation. But the above quote, 20 years old and said in a different context by the ever-lucid and much-too-soon-departed former MP for LDS is more than just a fitting description for the imminent congress of Positive Slovenia.

Game of Thrones

It is now clear that barring a U-turn at the 11th hour, Ljubljana mayor Zoran Janković and PM Alenka Bratušek will go head-to-head for party leadership and few people expect punches to be pulled. Only one of them will come out of the congress hall alive (politically, that is) and the result will have profound effects, both short- and long-term. But even though there can be only one president of the party, Friday’s setup is starting more and more to look like Game of Thrones’ Red Wedding. In the end, everyone dies.

Namely, the PS presidential struggle is actively entering the WTF section. First and foremost, it appears that every single junior coalition party is trying to have a say in it. Which is weird, but not completely unexpected. The weird part is that suddenly their opinions appear to count, media-wise. Karl Erjavec, Igor Lukšič and Gregor Virant seem to comment more on the situation in PS than they do on their own affairs. As if meddling in PS’s business somehow keeps the limelight off their own problems. Which it does. But they will die, too. Politically, I mean.

The three parties virtually manhandled Janković off the party helm in March February last year (in the wake of the damning anti-graft report), demanding PS get rid of Zoki lest they pass on a PS-led left-wing government. Their influence on the continuing of the Bratušek-led government has been pretty obvious ever since. But this time around, they’ve cornered themselves in: having entered the coalition on the sole proviso of Janković removing himself from the top of the party, it is widely expected of them to quit the coalition if Zoki wins on Friday. OK, so Janković doesn’t see why they would do something like that, but we’ll cover that particular disconnect with reality a bit later on.

They all die in the end

The thing with junior coalition parties is that with a possible Janković victory, they die either way. If they do indeed quit the coalition (as they should) and force early elections, the electorate will probably take it out on them, most notably Gregor Virant’s DL which just went south of 2% in public opinion polls. The coalition as a whole would fare poorly in such elections, too, and that would mean the SDS-led right-wing swoops back into power, Patria case be damned. On the other hand, if the coalition parties choose to maintain the coalition despite Janković emerging victorious, they would have only postponed the inevitable for a year or so and see themselves beaten to the pulp in 2015 elections. No wonder SD, DeSUS and DL have plenty to say these days on PS leadership.

But if PM Bratušek wins the party struggle, she will probably make them pay for making her job all that more difficult. Namely, every syllable Gregor Virant utters on the issue is making Zoran Janković more determined to challenge Bratušek. Because this is the one thing no-one seems to understand. With Jay-Z every action forces equal and opposite reaction and the more they want him out of the picture the more he wants back in. In this respect it is not unreasonable to say that the junior coalition parties have in no small part themselves to blame for the fix they’re in.

But that’s just the sideshow. The main event, the headliner, if you will, is scheduled for Friday afternoon. The build-up we’ve witnesses in the past few days and weeks suggests both Janković and Bratušek believe they’ve got things under control. Logic dictates at least one of them is terribly wrong.

Sun Tzu

The speed at which Bratušek and the PS Executive Council called the congress (technically, they rescheduled the event originally planned for October last year) suggests they wanted to give Janković as little time as possible to stage a comeback. And since there was no definite date for congress to be held, it would appear Bratušek and her people think they’ve secured a majority in the congress and want to get the leadership issue over and done with while the majority lasts. Like Sun Tzu said: battles are won and lost before they’re even started.

On the other hand, Janković believes in his ability to sway the crowds and the fact that he almost single-handedly built PS from the bottom up, winning the 2011 elections and almost reducing Janez Janša to tears. In a manner of speaking. Thus Janković believes he is a) entitled to the party leadership and b) is confident that majority of party members prefer his victor’s charisma over the occasionally stumbling style of Alenka Bratušek.

But this is where we enter the disconnect-with-reality territory. Ever since winning the elections, Janković was on the losing side of national politics. At first, he failed to form a government. Then he was forced to quit party leadership. After that, his October bid to stage a come-back was thwarted by postponing the congress. And now he seems to be the underdog.

The underdog

He said he will not be campaigning in the field, thus implicitly admitting time is not on his side. Instead he opted for a letter-to-the-members approach, but was beaten to the punch by Bratušek who sent her letter to party members first, thus setting the tempo and the tone of the game. Janković seems to be increasingly left to his own devices, re-launching his personal webpage, reactivating his Twitter account and using media access he has as mayor of Ljubljana. According to media reports he is also organising free transportation for his supporters to the congress. This is apparently within party rules, but media reports suggest this is not being done using PS assets.

Janković maintains this is not a fight of him against Bratušek, but rather a fight to return to the party platform from which the PM and her government deviated too much. In short, this is a fight between PS hard-line and soft-line. And yet, since both Jay-Z and AB came to personify their respective fractions, this is precisely a fight between the two protagonists. Sure, this is business, but in politics, business has long ago become personal. Especially since both of them said publicly they will quit the party if the other side wins.

Janković apparently thinks a lot of that is pure bluff. At least in terms of Gregor Virant, Igor Lukšič and Karl Erjavec threatening to walk out if he wins. Zoki may have a point, to an extent. There are noises about coalition parties not being serious with their threats. In fact, if Gregor Virant’s DL walks out, they might as well file to be erased (pun very much intended) from political party register because they will never again see the inside of the parliament. Igor Lukšič, for his part, said publicly the SD will not be the first to quit the coalition ranks, leaving Karl Erjavec (again!) in the role of the king-(queen-)maker. And Erjavec, as we know from previous experience, can be bought persuaded to go one way or another.

House of cards

But pengovsky’s bet is that all three parties will soon realise staying in the coalition will hurt them even more than leaving it as they would lose what little credibility they have left. If this is the bet Janković is making, he needs a reality check, pronto. Not in the least because Alenka Bratušek will most likely resign as PM if Zoki wins, taking the government and coalition with her. It’s all a house of cards, really.

The PM, for her part, has done fairly little campaigning, too. But then again, she has the party assets at her disposal as well as the support of a large majority of the PS executive council, most member of which presumably do her bidding. Also, being a PM and all she enjoys a broad media access as well with the added bonus of her appearing all statesmanlike (stateswomanlike, that is).

Additionally, Bratušek is winning over people who supported Janković’s 2011 bid. Pengovsky already wrote about how Milan Kučan‘s tete-a-tete with her was a message to Janković, but other people followed in Kučan’s footsteps, including Rajko Kenda, Spomenka Hribar, Svetlana Makarovič and – most notably – Miran Goslar, the very person who brought Janković in as CEO of Mercator and a man Janković often said has the highest regard for. Despite this Janković dismissed their calls to withdraw from the race “for the greater good”.

Ride of the Valkyries

“The greater good” in this case is not preventing Janez Janša returning to power. The leader of the SDS in this case really only serves as the bogeyman PS membership knows and is thought to fear instinctively. The true “greater good” is the fact that despite the Troika is no longer around the corner, Slovenia is still held virtually at gunpoint by foreign lenders as well as Brussels-am-Berlin. One wrong move and the yields on Slovenian bonds which have been falling slowly but steadily will shoot back up out of fear of already-sluggish reforms halting to a complete stop.

Granted, Slovenia secured its financing for a while, even returning to the euro market, but the accumulated debt gives precious little room for manoeuvre and unless the yields continue to drop (and the GDP somehow bounces back in the black) there is no way we can get out of this mess of our own accord. Analysts know this and they project early elections in case Janković wins. This, apparently would again draw a negative outlook for Slovenian bonds.

And you know what that means.

    April 23rd, 2014, posted by pengovsky

    The Gunfight At PS Corral

    There are many angles to the aftermath of the real-estate-tax debacle and the ruling coalition sought to close the fiscal one last weekend when they plugged a 200-million gaping hole in the budget. The deal, a combo of public-sector cuts and excise-hikes is not yet entirely done and is already drawing criticism from both labour unions and the Chamber of Commerce. But the dash to find two hundred big ones was soon eclipsed by what for all intents and purposes is turning out to be a showdown between PM Alenka Bratušek and Ljubljana mayor Zoran Janković.

    20140411 blog The Gunfight At PS Corral

    Namely, only a few days after the Constitutional Court struck down the real estate tax (with one of the judges resorting to Hayek as he did so), the interpelation of interior minister and leader of DL Gregor Virant was on the books.

    Now, Virant is in his own set of omnishambles, apparently getting the soft treatment by the anti-graft commission over cheap(ish) airline tickets he was buying at Adria Airways. While the price of the tickets, which was the main sticking issue, apparently is not all that problematic, he first claimed he didn’t have anything to do with it, saying his wife handled the tickets, only to see emails emerge (via Dnevnik newspaper) that he did in fact handle at least some tickets himself. Which basically boils down to whether he lied or not.

    Virant and Janković playing hardball

    Be that as it may, his position as the kingmaker was becoming ever more fluid as a result. Which in turn caused a low-level rift between pro-Bratušek and pro-Janković factions inside the Positive Slovenia to explode suddenly. Namely, the way Virant played hardball with regard to government policies (derailing VAT hike as a way to mitigate the real-estate fallout, to pick an example at random) built up quite a lot of resentment within the PS. Which was a signal Zoran Janković was waiting for to make his move and reclaim some political ground he is consistently losing since the party threw him under the bus in March last year, not in the least because Virant made that a precondition to ditch Janez Janša and join a PS-led government.

    Thus Janković had a little chat with several PS MPs and lit a fire under the anti-Virant sentiment, inciting a bit of a revolt and persuading several MPs to support the SDS-sponsored bid to remove Virant as minister of interior. This was of course a direct challenge to PM Bratušek who faced a similar scenario last summer and autumn, when Janković attempted a comeback and announced he wants to settle the question of party leadership, considering himself to have only “frozen” his presidency.

    Tables turning

    But back then Bratušek was being bombarded from all sides. Public finances were going south, so was the economy, the Troika was getting ready to deploy its drones against Slovenia, the opposition was rabid over having lost power only months earlier and the government itself wasn’t exactly ship-shape.

    Today, the tables have turned somewhat. The government itself is still struggling somewhat, case in point being ministry of silly walks health where Alenka Trop Skaza lasted less than a month. But the interest on Slovenian debt went down somewhat, we appear to be out of recession (technically, at least, not that anyone noticed) and despite a major setback with the real-estate tax the government pulled its act together and cobbled up a 200-or-so million revenue plan mostly by cutting subsidies and raising excise on alcohol and tobacco. On the whole, in April 2014 PM Bratušek is much more in charge than she was in July 2013.

    On the other hand, Zoran Janković was starting to see the results of various investigations opened against him, with charges being filed in at least two cases pertaining to his activities as mayor of Ljubljana while in a third case, about a deal while he was still CEO of Mercator, he was indicted and will stand trial. Additionally, Janković feels – not wholly unjustified – that he was used by several key PS people, helping them to re-emerge politically, only to find himself being thrown under the bus when push came to a shove.

    But be this a case of bruised ego, an attempt to stay afloat politically at any cost or, as Janković claims, a perfectly normal, if loud, clash of different visions, fact of the matter is that the rift between Bratušek and Janković is apparently complete and – unlike the last time, when it was avoided by postponing the congress – this time around a full-blown gunfight between the prime minister and the mayor is almost inevitable. And unless one of them blinks until 25 April when PS congress is to be held, it’s bound to get real ugly.

    Who will draw faster

    The fact that Alenka Bratušek is preparing for a (political) shoot-out suggests that either she doesn’t give a pair of fetid dingo’s kidneys about the outcome and whatever happens, happens, or that the outcome of the congress is a foregone conclusion and that Bratušek will win hands-down.

    A number of not-so-subtle signs suggest the latter to be the case. First of all, only a day after this particular political zit exploded Bratušek sent a letter to party members, basically saying that enough is enough. But more importantly, several days before that former president Milan Kučan met with Alenka Bratušek. Supposedly, they were talking about whether or not to raise VAT after the real estate debacle. But subject of the meet is secondary to the fact that it took place. Namely, Kučan was long seen as a key Janković ally and allowing himself to be seen meeting the PM, acknowledging her both as head of the government as well as head of the party, first and foremost sends a message to Jay-Z.

    But Bratušek is sending a message of her own. She announced she will seek a vote of confidence and will not tie it to a specific measure, opting instead for a simple yes-or-no vote (not like the last time around), refusing the rebelious MPs, four or five of them, apparently, all of them from her own party, the luxury of a political cover along the lines of “I voted for the [insert specific measure] and not necesarily for the PM”. This, too, sends a message to Janković that she considers her position much stronger and believes she has a better set of cards in hand than Ljubljana mayor.

    The shootout

    Whether or not he gets the message, remains to be seen. Both he and Bratušek have until Monday to formally confirm their leadership bids and although rumours are aplently that Zoki will withdraw his bid at the eleventh hour, this is highly unlikely. Much more likely that he and Bratušek fight it out on open stage on 25 April.

    But if he wins, Janković will find the coalition going tits-up and see early elections called, most likely bringing SDS and Janez Janša back to power in one form or another. That much is a given.

    April 11th, 2014, posted by pengovsky

    Real-Estate Tax, The Third Rail Of Slovenian Politics

    The government of Alenka Bratušek suffered a major blow Friday with the Constitutional Court shooting down the recently adopted real-estate tax and leaving a gaping hole in this year’s budget, just south of 200 million. In a unanimous 9-0 vote the judges unreservedly struck down the law on real-estate tax passed together with 2014 budget late ast year as well as a crucial piece of legislation allowing for mass-valuation of real estate passed in 2006 under Janša administration 1.0.

    20140402 blog Real Estate Tax, The Third Rail Of Slovenian Politics
    AB is probably a bit worried these days (source)

    The ruling is a resounding slap-in-the-face for Bratušek administration and has repercussion across the board. Remarkably, few of those repercussions are directly political. A number of factor come into play here, making the end result much less clear than the pundits will have you think.

    Namely, immediately after the ruling was announced, the dominant political and media line was that “the constitutional court passed a no-confidence vote against the government” with the implication being that the PM should resign sooner rather than later. Even more, the trouncing of – admittedly – a key piece of legislation caused a furore of tweets, soundbites and articles about how AB lost her legitimacy as head of the government, especially since she tied her own confidence vote to passing of the real-estate tax. All of which is, of course, a load of bullshit and at the same time a nice example of pack-hunting.

    Namely, the idea that a negative ruling should result in a government dismissal is flawed both from a legal as well as political sciences perspectives. Under current legal system the only scenario where the constitutional court has *any* say in the political fate of the executive branch is in an impeachment procedure and even that requires a 2/3 majority in the parliament beforehand.

    Which brings us to the political sciences angle. The concept of checks and balances is based on the legislative, executive and legal branch being independent of each other whilst equipping each to curb excesses of another. In this case, legal instruments lie with (and were exercised by) the constitutional court, while the instruments of political control lie solely with the parliament.

    Additionally, while the measure was a part of the 2014 Budget, to which AB tied her vote of confidence, she did not do so specifically for the real-estate tax. And even if she did, the ruling would have in no way implied the vote of confidence is now somehow overturned. Therefore, if any political fallout were to follow government’s routing in the courtroom it would require a new and unequivocal act by the parliament

    Alternatively, the PM could, technically, resign of her own accord. And this is what the opposition and the pundits want her to do, knowing there is no new majority in the parliament to replace her. Now, if Slovenia were a country with a high level of political culture, that might even be a valid expectation. Taken solely by itself, the real-estate tax is the so-called Third Rail of Slovenian politics and governments much stronger that the Bratušek administration got burnt on the issue. But there is a world of difference between attempts of the Pahor or (partly) Janša administrations to enact a policy decision and a dash to close the budget by any means possible.

    And in a country where constitutional court rulings go ignored for years on end, where the constitutional court itself reneges on its own precedent time and again and where and where politicos refuse to resign even after being sentenced in a court of law (appeal pending), expecting a PM whom few people deem capable of doing her job to adhere to the highest political standard is hypocritical at best.

    So, what happens next? The immediate task of Bratušek and finance minister Uroš Čufer is to close the leak in the budget. Čufer proposed a VAT hike but hit a slightly unexpected roadblock in the form of Gregor Virant and his DL. The interior minister is facing an interpelation (no-confidence vote) courtesy of the SDS. But Virant was in a lot of hot water lately and his political standing is starting to follow his party’s ratings, i.e. going south. Which is probably why he’s upping the ante, most likely trying to trade budget measures for votes in his favour on Friday.

    The fact that EU elections are only six weeks away does not help the issue, the same for rumours about Zoran Janković trying to re-take the party. EU elections will soon be followed by local elections in Autumn and parliamentary elections in 2015 if not sooner. Point being that there will be precious little room to pass any meaningful measures as more time passes.

    Third rail or not, it might very well be that the real-estate tax might soon prove to be the least of Bratušek’s problems.

    April 2nd, 2014, posted by pengovsky

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