Gold Rush

In a development that surprised a grand total of zero people, Marjan Šarec, mayor of Kamnik and erstwhile presidential candidate announced yesterday that he will take part in the parliamentary election. This comes on the heels of a host of new political parties announced or already formed and ready to enter the already-crowded arena. And with the vote six months out it is high time pengovsky takes a closer look at the lay of the land .


Slovenian ballot box (photo by yours truly)

Although reguraly decried by their more established and/or traditional cousins as attempts to con and defraud the good citizens of Muddy Hollows, new parties are by no means a purely Slovenian phenomenon. Case in point Czech Republic (or Czechia, as it now wants to be called in English) where a large majority of parliamentary parties have yet to celebrate their tenth birthday and one was established only two years ago. Or neighbouring Slovakia where two parliamentary parties were non-existent as little as three or four years ago. Or even France, where the right wing is currently billed as Les Republicains but used various acronyms throughout the decades as its (originally Gaullist) platform evolved. All this and we haven’t even mentioned Emmanuel Macron’s La Republique En Marche which was but a figment of imagination as little as eighteen months ago but has since opened a can of whoop-ass on the French political establishment.

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Lunatics Have Taken Over The Asylum (Policy)

It takes a special sort of naiveté to look at the last ten days in Muddy Hollows and see it as anything but a shameless run for cheap political points. The matter at hand is the issue of one Ahmat Shani, a Syrian refugee who ended up in Slovenia where the state is refusing to process his asylum application and is now facing deportation to Croatia.


Ahmad Shami (source)

Ahmad Shami was a part of the 2015 refugee exodus which – despite numerous warning signs – caught the EU more or less unawares and scrambling for stop-gap solutions, hobbling the Schengen area and inducing levels of panic and overreaction not seen since, well, the eurozone crisis. But Ahmad Shami probably cared less about that than getting to safety and making sure his immediate family could follow in his footsteps.

Continue reading Lunatics Have Taken Over The Asylum (Policy)

Playing To Lose, Cerar Goes About Saving Private Mramor

Yesterday, finance minister Dušan Mramor offered to resign over a bonuses scandal that’s been overflowing for about two weeks now. In what was a somewhat unexpected move, PM Cerar did not accept the resignation. Instead he subjected Mramor to a mere slap on the wrist and then proceeded to extol Mramor’s track record at the ministry. Although the affair involved relatively modest amounts, the public and the media were indignant and the pundits were near-unanimous that Cerar will let Mramor go. Since he didn’t, the overall sentiment is that Cerar committed political suicide and will never be re-elected again. The truth, in pengovsky’s view, is somewhat different: Cerar has long since become unelectable, most likely on Day 2 of his tenure. It just took him over a year and two pan-european structural crises to come to that conclusion. Thus in terms of his own political future he has little to lose. He can, however, make the remaining three-and-a-half years count. And for that, he needs Mrarmor more than Mramor needs him.

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Miro The Man and Dušan The Man’s Man, some time ago. (source)

The gist of the story is that Mramor, while serving as dean of the Faculty of Economics in 2008, OK’ed use of special clause in labour legislation that provided for a 24/7 standby bonus. The clause was meant to be used to augment paychecks to various branches of first responders and similar services, but in mid-2008, apparently to circumvent the havoc wrought by the across-the-board austerity at the time, the faculty came up with this clause and, well, bent over backwards to expand its interpretation to cover university professors as well. The move worked so well that it was copied by nine out of eleven faculties, members of University of Ljubljana (Faculty of Theology and Faculty of Law being the notable exceptions).

Unmitigated disaster

Now, ever since the story broke, it has been an unmitigated PR disaster for Mramor and everyone else involved. This includes Minster of Education Maja Makovec Brenčič, former SD heavyweight and incumbent dean of the Faculty of Economics Metka Tekavčič and several other public personae. Especially daft was the feeble defence mounted by the faculty, now with Tekavčič at the helm, which only reinforced the perception of entitlement on the part of the academic elite. The fact that the whole issue centered on about half a million euros across nine faculties, did little to ausage the problem. Quite to the contrary. It is a known quirk of the Slovenian voter that the more he or she can relate to a number, the more emotional their response will be.

Case in point being Mramor who, over the years, accumulated around 45k euros in “standby bonuses”. 45,000 euros is not an unreachable amount of money. It’s about three-years-worth of average Slovenian wage. To put it another way, 45k will buy you an mid-to-upper-range BMW. Which is what makes the people so mad. They have an approximate idea about how much 45k euros actually is and they base their judgements on that. To put in perspective, only about a week ago, Slovenia was forced to pay 42 million euros (almost a thousand times more) to Croatia as damages for electricity not delivered from Krško nuclear plant between 2002 and 2003, when a political decision was taken to punitively and unilaterally withhold electricity from Croatia, even though the neighbouring country owns a 50% stake in the plant. Point being that the voters will more likely and more furiously take issue with smaller amounts of money. Doubly so if the payouts are legally dubious, as they are in this case.

Now, in the end Mramor has promised to pay back the whole amount, but only after being prodded by the media and – presumably – by the PM himself. Before that he somehow came to the conclusion that he would only pay back some 3000 euros. As if we learned nothing from the case of Gregor Virant in 2011.

Do-Goodnik becomes unelectable

But enough about Mramor. What he did was wrong, regardless of the motives. And while he’s not off the hook just yet, he does get to live another day or so and in politics a week is a lifetime. What is equally interesting, however, is why Cerar bailed Mramor out in the first place and squandered what little remained of the ethical platform the SMC ran on in 2014.

First, the already mentioned fact that Cerar has, in fact, been unelectable for some time. At the very least from the onset of the refugee crisis where he alienated a substantial part of the progressive vote by raising a razor-wire fence on the border with Croatia and empowering the military to police civilians. On the other hand, he only infuriated the right-wing which – although clamouring for these measures – predictably deemed them to little, too late, when finally passed. But in all likelihood, Cerar’s political demise began soon after he began his term, when the high-flying ethical do-goodnik platform met the bleak politcal and economic reality of Slovenia. After kicking ministers out for much smaller transgressions and having seen himself and Mramor brush with a similar affair, Cerar finally realized that it was in effect he himself who was pulling the rug from under his feet. Others were just helping.

Not that there was any lack of help. During yesterday’s press conference, Cerar took a swipe at SDS and SD, more or less saying that he will not have the composition of this government being dictated to him. That the SDS is making life difficult for Cerar is hardly news. After all, they’re the opposition, even if they’re being strangely blunt about that as of late. Namely, according to one source, the party openly threatened the SMC with making their life a living hell if the largest party does not support the SDS nominee for a vacant post at the European Court of Human Rights. The SMS refused to oblige. Hell did in fact commence.

SD ante portas

But the slap across the face of the SD was much more telling. The party, although still in relative ruin after its electoral flop, was given a new lease of life by Cerar’s strategic mistake of making them coalition partners. It soon started to re-establish its economic base and soon enough found itself in a massive brawl with the SMC over the sale of Telekom Slovenije. The SD lost that particular battle but stalled the whole thing just enough to derail the sale. Then came the beheading of the bad bank where SD gained a whole new range of informal power and – not unimportant – where Mramor lost. Which sort of made him the next target. And since he was apparently vunerable in the bonuses department… well, you now know the story.

From this point of view, had Cerar accepted Mramor’s resignation, the SD would have practically owned the government. They’ve squeezed a number of consessions out of Cerar as it is. The latest one being a shamelessly brazen creation of a party fief. officially known as the State Forest Company, it centralizes forestry management and falls under the purview of – yup, you guessed it – minister of agriculture, forestry and food, headed by leader of the SD Dejan Židan. Had Cerar allowed them to go any further, he would relinquish what little control he has on the home front.

Bond…. Sovereign bond

Ditto for the foreign front. Had Cerar relieved Mramor of his duties, Slovenia would in all likelihood start raising many-an-eyebrow of various investors all over the world. Until now, these were more or less happy to buy Slovenian debt precisely because Mramor and his predecessor Čufer handled the post-bailout situation adroitly and took the country of various watch-lists in Brussels, Berlin and Washington, even though (in all honesty) the pace of reforms and privatization has been glacial, at best. Bottom line, with the to-do list still being more or less the same as it was under Bratušek tenure, Mramor is Cerar’s best insurance against the possibility that the humanitarian and political crisis (in terms of EU issues) is joined by a resurgent financial crisis, too.

Thus, by protecting finance minister Mramor, Cerar conceded that he’ll lose the next elections. ironically, to win them, he probably has to play to lose, anyhow.

Bad, Bad Bank. Heel.

As both readers of this blog know, the government of Miro Cerar decapitated the management and the board of the BAMC – Bank Asset Management Company, a.k.a. the “bad bank“. With dismissal of Lars Nyberg as head of the board and Torbjörn Månsson as CEO, the rest of the international team left, as well, leaving a power vacuum at the top of the institution tasked with making the most of bad loans that hobbled the Slovenian banking sector and the economy in general.

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Since its conception, the bad bank has been an unloved child, more or less forced upon the government(s) by the looming troika back in the days when shit was getting real and Slovenia was teetering on the brink of the bailout abyss. Now, the bank had its fits and starts, with outside consultants being heavily relied upon to turn the legal mandate into a reality while the political turmoil was reaching new peaks and the mandate itself was frequently changed. The management of the bad bank also changed quite a bit, finally settling down with Nyberg as head of the Board and Månsson (who served as a consultant during the conception of the bank) as CEO.

The bank and its management were never far from centres of controversy. Be it the way they managed assets, or the very nature of the assets they were given to manage, they always irked somebody. And since the top execs were outsiders (with Slovenians serving in non-executive management roles), there was a noticeable unease and even apprehension with the institution across the political spectrum. This of course did not prevent the political parties bashing each others’ brains out with whatever shit the bank dug out on any given day, depending on whose daily agenda the issue at hand served best. But the thing was that during the last 25 years enough dubious business moves were made and/or politically ordained on both sides of the aisle, that no one was coming out of the cesspool clean. There was no guarantee that politically sensitive issues will be kept at bay, that names will not be named and that clout will be kept.

This is one of the reasons the bad bank was under intense scrutiny from the very beginning. Leading the charge was the Court of Audit which, understandably, wanted to keep an eye on how state’s assets were being managed. Turns out that the management had a hard time putting legal provisions in practice and that not all decisions were up to standards. Accounting and otherwise. To put it plainly: in 2013, the first year of operation, money was spent lavishly but to little effect. Månsson defended his work saying that the mandate was changed frequently and that a lot of that money went for adapting to the new circumstances. And, to be honest, in 2014, the bad bank did come up with results, selling some debt (transferred at a discount) for a profit. On the other hand, managing real estate left a lot to be desired, to put it mildly. So the results were there, albeit not spectacular . But still. Since the bad bank was chartered for five years with the understanding that it would get another five, things were seemingly moving in the right direction.

Wag the dog

Not everyone was pleased with that. Local economic chieftains, once considered pillars of society (aren’t they all, until they come tumbling down), were quite unhappy with outsiders basically showing them they know jack shit about running a business when the going gets rough. With the downfall of economic powerbases a number of different informal networks, consisting of politicos, moneymen and opinion makers began to unravel which again, was an unwelcome turn of events for many. Which is why the bad bank was under a near-constant stream of accusations of wrongdoing. Most of these accusations were based on the audit for 2013, while others, more populist ones, included the claim that “foreigners were lining their pockets on account of the Slovenian taxpayer” and scandalisation over salaries of the BAMC top brass. A classic wag the dog moment.

And, as usual in Slovenia, this worked pretty well. BAMC management was well paid. Extremely well paid, to be exact. 20k € before taxes is not peanuts in Slovenia, although one gets left with slightly more than 50% of that after the various parts of the state (welfare and otherwise) have taken their share. Still, not exactly what one would call a negligible amount of money.

But while your average Slovenian was scandalised over the numbers, what no one cared about was that these rates are more or less common in this line of business. For all intents and purposes, Månsson was the official receiver of the state and para-state assets. And if you want someone from an international market to run that for you, you pay international prices. Sure, the management of the bad bank in all likelihood was not top-tier, but then again, Slovenia can’t afford to pay top-tier prices. We got our money’s worth and still Månsson and his people were able to do more in a year and a half than the various local polit-economic brain trusts were able to do in a decade. Which begs the question who exactly was, in fact, overpaid.

Point being that the public outcry over paychecks is just a smoke-screen for taming a force that was wreaking havoc on the established order of things. Because regardless of the waste the 2008 meltdown laid upon the economic landscape of this country, the balance of power remained more or less unperturbed. Even the fact that the right-wing slammed the left-wing for undermining the bad bank, it only did so because it was not itself in power. And had it been, the left-wing would have slammed the right-wing for fire-selling state assets.

When Christmas comes early

Oh, wait, but this is exactly what the left-wing has been doing for the past year and a half. You see, from their point of view, PM Cerar and FinMin Mramor are little more than agents of the neoliberal locusts, while from the point of view of the right-wing they are nothing but custodians of the communist economic power structure. Both views are as much self-serving as they are wrong. Cerar and Mramor (the latter definitely being on the hawkish side of the austerity debate) are primarily concerned with rocking the economic boat as little as possible. And since the SMC is essentially a populist party, given its quick rise and patch-work platform, they could ill ignore the issue which, however misguided, enraged the people. It was therefore easier to cut Nyberg and Månsson loose than to pick a fight that could well bring down the coalition.

As a result, the Social Democrats, the most junior of the three coalition partners, have again gained in strength as they will no doubt drive a hard bargain in negotiating who gets to be the bad bank’s new top dog. Karl Erjavec of DeSUS, too, will strive to cash in on the situation, but his is a different playing field. Everyone else, too, will want a piece of the pie in return for not causing too much trouble. The only ones who will be left out in the cold nursing their hurt pride will be the ones who carried the anti-bad bank banner all those years: the United Left (ZL).

The ZL went all out against BAMC on ideological grounds. Pure as their motives were, the party somehow failed to notice that they are merely carrying bag for their left-wing competition. While the “only true left-wing party” was up in arms, the SD (bleeding voters and probably ripe for a trip to the Happy Hunting Ground) was sitting back and enjoying the ride and is now laughing all the way to the (bad) bank. To put it another way: Christmas came early for the SD and ZL was the Santa’s little helper.

And now, in the power vacuum, all kinds of shady deals can be made. Including the one which seems to have caused the downfall of the bad-bank management in the first place:

This seems to be the crux of the matter. The moment it actually started doing what it was supposed to be doing, the bad bank stepped on so many toes so fast everyone wants it to just disappear. Much of this was summarised in this must watch interview-cum-explanatory with BAMC project manager Janne Harjunpää (in English) ran last night by the RTVSLO (of all places 🙂 ). The present situation is nicely summed up in this six-minute clip, together with the explanation why both left- and right-wing want BAMC tamed.

And before someone goes ga-ga over yesterday’s CrimPolice raid at the bad bank, supposedly investigating consultants’ fees and board wages, let us not forget that a) these things rarely come to fruition and b) are probably nothing more than just a back-up plan in case the dismissed top brass claims severance pay.

It’s the power, stupid

At the end of the day, the government of Miro Cerar will have to choose a new board. The PM said this will be done by an international tender, but this means nothing if he and the finance minister fail to curb the greed and power grab of the traditional political parties. Not only are they used to this, they need such an economic backbone to plot their way back to power.

After all, that is what it is all about.

Slovenian Elections: The Purge

In what can only be described as a rout, Miro Cerar won Sunday Slovenian elections in a landslide, winning 36 out of 90 seats, with two of those being reserved for Hungarian and Italian minorities. Thus, the law-professor who in August will turn 51, is the new Slovenian PM-presumptive.

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Miro Cerar, PM-presumptive (source)

Having said that, the real work begins for Cerar only now. In the election campaign he notoriously avoided taking a position on any specific issue, clearly aiming for (and achieving) a catch-all effect. Even his victory speech on Sunday night was lacklustre, to say the least. It was more of his dalai-lama-meets-law-professor-meets-soft-populist rhetoric, nothing and everything at the same time.

PM-presumptive meets the coalition

On one hand, this is understandable. Cerar won, but if Zoran Janković, winner of the last elections is anything to go by, it is very easy to squander a relative majority by closing too many doors early on. On the other hand, it was Cerar who was given a clear mandate to rule the country so he needs to start taking positions and dictate the tempo. Until now, he was mostly re-active, for example excluding a possible coalition with Janez Janša‘s SDS only after Janša shot first and excluded a possible coalition with SMC.

The main issue for Cerar therefore is to make sure he does not become a hostage to his coalition partner or partners. Most likely plural. Namely, if here were to form a two-party coalition, DeSUS is his only choice. Which means that every time a sticky issue would come up, Karl Erjavec would balk and threaten with leaving the coalition, thus forcing Cerar to give in. And Erjavec can be really persuasive. Just ask Janša, Pahor or Bratušek.

So step number one for the PM-presumptive is to leave DeSUS out. Which already limits his options. Step number two will most likely be to make sure his is more than just a single-vote majority, again, for the above reasons. This means he will have to reach both left and right. With ZL not being a viable option, Cerar’s possible coalition partners include Social Democrats, Alenka Bratušek Alliance and the NSi. And mathematics suggests he will try to form a ruling coalition will all three of them.

Such an approach would be advantageous for many reasons. Fist, it would put him at a comfortable 51 votes. Second, it would adhere to his pre-election “why can’t we all just get along” mantra. And third (and perhaps most important) it would leave enough room for manoeuvre vote-wise for any of the junior coalition partners to depart from the common line every now and then and still not endanger the 46-vote majority.

Thus, for example, the SD could oppose further privatisation plans (and keep what is left of their electorate happy) while the legislation could still be passed, without endangering either the 46-votes majority or the coalition itself.

And last, but not least, this approach would be reminiscent of the way the late Janez Drnovšek put coalitions together and it is always good to be compared to Drnovšek, even though Cerar right now doesn’t even come close to the legendary PM. However, while Cerar is mulling his next move, the exact opposite seems to be going in the SDS, as their shoot-first-ask-questions-later approach backfired badly.

The purge

That the SDS took a beating goes without saying. Sunday saw their worst performance in the last decade and only slighty better than their results in 1996 and 2000 elections. Even worse: when compared to the overall number of eligible voters, support for SDS in 2014 elections boils down to a mere ten percent of adult Slovenians. Granted, this says a lot of other parties as well, but is especially damaging for a party which promotes itself as the only one defending patriotic values and does a lot of flag-waving at every opportunity.

After Janez Janša was admitted to prison due to a confirmed guilty verdict in the Patria Case, the SDS made their glorious leader the focal point of their campaign. SDS MP and one of party vice-presidents Zvonko Černač took centre stage and demanded Janša be released at every opportunity. No longer was their election platform important, they focused solely on Janša, claiming elections are not free and fair without him.

After the results came in, Černač repeated the #freeJJ mantra and added the party will not be taking active part in parliamentary procedure. There were even reports about their elected MPs not actually taking office, but the plan was supposedly dropped as it became clear that in that case new elections would simply be called for vacant seats.

Anyhoo, after the SDS openly threatened to derail parliamentary procedure, media back-lash ensued followed by what was reported as a fierce debate in the party Executive Council. As a result, Černač backtracked on the issue, saying he was “misinterpreted”. Now, let’s take a moment and reflect on this.

What happens when the alpha-male leaves the pack

For the first time on bob-knows-how-many years, the SDS made a complete and unreserved U-turn in a little more than 24 hours. This is the first example of what pengovsky projected the moment Janša was put behind bars. The alpha-male is out of the game on a daily basis and his replacement does not carry nearly enough clout for decisions and moves to go unquestioned.

And there’s a lot of bad blood in the SDS right now. Some of their key people didn’t get elected even though they were thought of as fixtures of Slovenian politics. Cases in point being the above mentioned Zvonko Černač (which means he has even less clout in the party and his position as Janša’s point-man is in peril) as well as Jožef Jerovšek, who served as SDS MP continuously since 1996. Ditto Andrej Vizjak, who got elected for the first time in 2000 and held many posts ever since, including that of minister of economy (2004) and labour (2011).

Moving away from the SDS, Franc Pukšič, the industrious former mayor of Destrnik, who held an MP seat continuously since 1996. Pukšič started as an SDS member but switched to SLS in 2008. Since the party didn’t make it above the 4% treshold, one of the more distinctive features of the parliament is gone. Just like that. Ditto for Pukšič’s much more mild-mannered party colleague Jakob Presečnik.

Rout of the left

The purge of course wasn’t limited to the right side of the political spectrum. Lucky for them, a lot of more experienced SD members decided to retire and had evaded the voters opening a can of whop-ass on them. But the purge of the SD is going on for quite a while now. In six years they went down from thirty (2008) to mere five MPs (2014).

The purge, however, was complete for what was left of Positive Slovenia. The party of Ljubljana mayor Zoran Janković didn’t make it above 4%, reducing Zoki’s aura of invincibility to, well, sundust. Janković is in a lot of trouble right now (both legally and politically) and should start getting concerned with his plans for another term as Ljubljana mayor. His opponents smell and see blood and his tenure in the city hall is all of a sudden much more insecure. The party, however, is more or less dead in the water. It might carry on, but it will remain a mere shadow of its former victorious self.

The caretaker PM Alenka Bratušek, however, fared slightly better. When her fight with Janković split PS down the middle and she and her supporters went to form their own party, her stated goal was to best PS in the polls. Which was kind of weird at the time as the consensus was they should be concerned with making it to the parliament first. But in the end, it turned to be one and the same goal. Bratušek can, in a sense, count herself as coming out victorious. But the price that was paid for her four MP mandates was extortionate. On the bright side, however, she can once again resume comparing herself to Brigitte Nyborg of Borgen 😉

Skipping over the NSi which continues to take its rightful place in the parliamentary political spectrum, even increasing their result by one MP seat, this leaves us with the real surprise of the election Sunday, the United Left (ZL).

The surprise

The party of “democratic ecological socialism” was looking to Greek Syriza for a role model and is questioning the established order of things. In the end they got 5.96 percent which translates into six seats. They sport a three-member presidency, but it was Luka Mesec, the youngest of the trio of leaders, who emerged as the most recognisable face of the party. It was his appearance on a POP TV-held debate on Thursday, three days before the elections which sent the party rocketing from around 2.5 percent way above the parliamentary threshold, in the end nearly tripling their result.

On a personal note, pengovsky got into a bit of hot water with ZL fanbase for saying that Mesec brought in votes of older women on account of him looking good and saying smart things. A rather tedious debate followed where accusations of mysoginistic statements were thrown in my general direction. But while further analysis did indeed show their voters mostly come from below-45 age group, a third of their vote still comes from 45+ age group. A third, meaning two out of six percent of votes won. Which means, 45+ age group was just as instrumental in pushing the ZL above 4% than younger voters.

Additionally, another analysis showed about 50% of ZL voters decided to pick them in the last couple of days, emphasising the importance of Mesec’s appearance and performance in the debate.

Now, anyone with any experience in campaigning will tell you that TV debates are not really about substance but rather about showmanship. You might have the best platform in the world, but if you’re not telegenic enough or if you make too many mistakes, you might as well throw in the towel. So the point pengovsky was trying to make is that while ZL platform is nothing to scoff at, it was Mesec’s TV performance (his telegenics) that made the difference. But, the fan-base insists it was the platform that brought in the entire six percent of the vote.

Shifting the discourse

Be that as it may, the ZL is in and is bound to shift the political discourse to the left. Which in itself is not a bad thing. Too many things in this society are taken for granted and thought of as set in stone, which is one of the reasons this country moves at a sluggish pace at best.

But theirs is a hard task. They will inherently be branded as far-left, even though one could make the argument they are the only “true-left”, platform wise. Secondly, their set of ideas is only one of many competing sets in the parliament, all of which are perfectly legitimate, some more appealing to one part of the society, some to another. Thirdly, they are newcomers. Pushing your agenda has to do a lot with knowing your way around rules and procedures of the parliament. Fourth, they will need to hold their nerve and not lash out against more experience MPs patronizing them or even setting procedural traps for them, supposedly to “put them in their place”. The parliament is a tough neighbourhood and while everyone is smiling and wears a tie, backstabbing is often the norm. And lastly, the ZL need to be careful not to get smug too soon.

A lot of people invested a lot of hope into them and while the some expectations are unreasonable by default, the ZL MPs were not elected to the parliament to be like other MPs but to be better than them. And that’s a benchmark others before them failed to achieve.