Numerous families and individuals living a life trapped between high living expenses and mounting extortion proceedings. Promises of making the system of private bailiffs and property extortion more just or ending it altogether have been skilfully exploited by populist politicians.
Populist politics in the Visegrad countries make heavy use of the protest vote, disillusionment with levels of corruption and the state’s failure to secure decent living conditions for its population.
Work in the black market and job insecurity, in general, are not only widespread problems for the more viable development of societies and economies across the region. These pressing social issues are also posing a challenge to the idea of democratic and united European Union.
An acclaimed Czech journalist Saša Uhlová has reported on numerous families and individuals living a life trapped between paying for living necessities while being stripped of property by mounting extortion proceedings.
In one of her articles, she writes of a former professional soldier, sergeant, whose bank account was suddenly blocked as several extortion proceedings were instigated against him for freeriding on public transportation. Some of the original debts were from as far back as ten years ago and spiralled to some 120,000 korun (approximately 4,500 euros) through the incurred late charges and remunerations for the bailiff.
“When I was sworn in I nearly had tears in my eyes, that is how much I idiot believed in it then […] and now you go there and see a state symbol on this institution” – an extortion office.
The set of laws that enable creditors to be virtually in charge of the whole process and the involvement of bailiffs motivated by remunerations for the value of recovered debt makes property extortion a systematic business for some, but a never-ending nightmare for others.
Out of a population of ten million, there are nearly a million adult Czechs directly affected by extortion proceedings.
Spiral of debts
Founder and Director of the Prague’s Institute for Debt Prevention and Resolution Radek Hábl sees the greatest challenge in the system enabling private bailiffs to extort debtor’s property. Hábl explains why this is problematic:
“To have private bailiffs competing in the free market is just plain wrong in all possible aspects. Bailiffs shouldn’t be allowed to compete with each other over contracts. The result is that people in extortion proceedings are literally stripped naked of property, and are then unable to pay their other bills causing them to sink ever deeper into debts. Nobody receives anything, society as a whole suffers, the circle closes down”.
His words find reflection in a survey conducted by country’s forefront sociologists Daniel Prokop and Michał Kunc for Alarm where Uhlová works as an editor. It is fittingly presented as “Czechia’s black conscience”. A research report from December 2018 is the first systematic data collection about the lives of people in extortion proceedings.
One of the most striking features is that people in extortion proceedings “frequently make transitions into illegal work as part of the black market. We expected this finding, but not on such a large scale”, points out Kunc in a commentary piece for Alarm.
In a situation in which half of the debtors have no prospect of ever returning to normal life, and instead are facing mounting extortions far exceeding their debts, this perhaps comes as no surprise.
Moreover, the bare minimum living wage, which cannot be subjected to extortion, is simply too low to make for living in the urban areas of Czechia (until recently 6,000 to 12,000 korun (220 to 440 euros) depending on the number of children in the household plus a third of the salary, but not more than 3,000 korun or 110 euros).
Illegal works, where remuneration simply cannot be confiscated, is often the only remaining option for people in extortion proceedings. As Prokop notes, what is surprising is the lack of interest of centre and centre-right political parties in this segment of the population.
It is difficult to draw a clear cut parallel with the Czech extortion system on the regional or European level. The very term “enforcement”, which the EU’s e-justice portal uses, does not reflect the specific Czech reality where private bailiffs are in practice bounty-driven entrepreneurs rather than law enforcement authority.
Slovakia ended the practice of private bailiffs in 2017 and imposed territorial restrictions allowing court-appointed bailiffs to enforce only within a particular territory, and not wherever creditors assign them the “job”.
The President of the Slovak Chamber of Bailiffs, Miroslav Paller points out that these measures significantly diminish corruption as well as private bailiffs actually breaking the law in their effort to make more profits.
Stronger and more able ones survive
Where parallels across the Visegrad countries are rather striking, however, is the employment of the right-wing political discourse ostracising the weak and the disadvantaged.
In evaluating his series “Meanwhile in Cuckooland” about developments in Polish society and politics under the ruling PiS party, writer Tomasz Oryński recently applied Lawrence W. Britt’s fourteen characteristics of fascism to contemporary Poland.
The tenth characteristic “power of labour suppressed or eliminated” fits in well with “the pathological scale of fake self-employment and zero-hours contracts on the Polish job market”. Moreover, the largest trade union organisation, Solidarność, has sided with the government instead of its own members during teacher strikes highlights Oryński.
It is a frequent sighting to blame the people in extortion proceedings for their own situation. In some cases, they are blamed for having low financial intelligence, and as Uhlova notes, issues pertaining to poverty, in general, are “automatically associated with the Roma minority”.
In contrast, success, wealth and social status are associated with hard work, intelligence or skill, and these are implicitly portrayed as simply not possessed by just everybody.
Majority owner of Home Credit of PPF Group, which ended the controversial practice of those extortion proceedings previously ruled illegal only this May, complained in PPF’s last year’s annual report that values thanks to which his generation built its businesses are under threat.
According to the richest Czech Petr Kellner, “freedom, work ethics, entrepreneurship and respect for traditions” are threatened by “ideology of individual demands, equalitarianism and relativizing of traditional values” as such “ideology” has taken hold of western societies and Europe in particular.
This interpretation of the world as a rewarding place for those who work and try hard, and in which those who do not work simply do not have, accompanied the post-communist shift to the neoliberal right in the Visegrad countries in the years following the fall of Soviet-backed regimes in 1989.
Western liberalism became “the great eschatological metanarrative”, writes Josef Švéda in his “Mašín Myth”. This metanarrative effectively weakened the left by discrediting it with the ‘Soviet-style’ communism, and by the same token, it discredited authentic agenda of protecting the weak and disadvantaged traditionally associated with left-wing policies as dangerous totalitarian rubbish.
Disillusionment and disinformation
What Kunc and Prokop’s research shows in the context of Czechia is the widespread passivity and disengagement with political issues among people in extortion proceedings. Consequently, these people are easily “mobilized by some cultural conflict aroused during one televised debate – about immigration, smoking in bars, etc.”, points out Prokop and warns:
“These people are the “wild card” of populists in a potential vote about leaving the EU or similar conflicting votes. Keeping of nearly a million people in a situation in which they have no interest in democratic or pro-western developments in Czechia is perhaps a greater issue than fake news or Russian propaganda”.
In March of this year, Prokop’s words of warning were further supported by a rather telling example. Team of reporters from Czech TV and Respekt magazine were able to trace down the identity and whereabouts of a person behind the content of one of the most notorious disinformation websites – AE News, widely known as Aeronet.
It transpired that an individual named Marek Pešl lives on the outskirts of Trenčín in Western Slovakia. Pešl did not disassociate himself from Aeronet when approached by journalists and also mentioned mysterious “group of people from patriot circles” as his collaborators in an effort to produce allegedly “more balanced reporting” on the conflict in eastern Ukraine.
According to the reports of the Czech Elf Group, Aeronet is one of the hubs of Czech-written pro-Kremlin narratives. What is of interest is that Pešl himself is in a number of extortion proceedings in Czechia. In his native village of Branišov in Southern Bohemia, his family house was sold out during one of the proceedings. Other proceedings concern his debts for unpaid electricity bills and other utilities.
Moreover, analyst Roman Maca gives examples of Serbian-Czech Žarko Jovanovič, running the disinformation Raptor TV, or pro-Russian activist Jiří Černhorský who face numerous extortion proceedings and personal insolvency. It would be a far stretch to claim that extortion laws are directly responsible for the disinformation contents of Aeronet or Raptor TV.
However, stories of individuals behind these outlets are some of the better-documented examples of how disinformation activities are not only a result of hostile activity behind the notorious walls of Kremlin far away from Czechia. More poignantly, disinformation activity makes use of very concrete social burdens produced by the Czech legislature.
This is also well seen on how the uncertainty surrounding the future of work in the digitalised world has been employed as one the dominant themes of the content produced during the COVID-19 pandemic in March by Aeronet as well as by Kremlin-linked Sputnik website or chain emails spreading disinformation content.
As the Elf monitoring notes, some of the frequented disinformation narratives depict the post-COVID-19 world as “globalists’” paradise in which world populations will be controlled digitally. Restriction of movement of those with Covid-19 diagnosis will be a welcome excuse for reducing the workforce and paving the way for the full replacement of human labour with AI.
It is rather alarming to see how these narratives resonate with parts of Prokop’s commentary about actual impact extortions have on voting preferences.
“In larger municipalities and cities extortions increase the likelihood of anti-systemic vote. […] While we know that people in extortion proceedings are not voters of extremist parties it also speaks a lot about attitudes of people in their surroundings”.
One only needs to look at the “severe housing crisis” across the Visegrad countries to get a sense of a toxic combination of insufficient wages and the scarcity of affordable housing.
According to the European Foundation for the Improvement of Living and Working Conditions, the Czech minimal wage for 2019 (519 euros) is nearly identical or comparable to that of Slovakia (520 euro), Hungary (464 euro) and Poland (523 euro).
As a case in point, Hungary not only has the lowest minimum wage relative to its V4 partner countries but as analysts point out its “housing deprivation is the highest”. The COVID-19 measures will worsen the existing situation across the union.
Recycling of empty promises
Moreover, campaign promises of making the system of property extortion more just or ending it altogether have been a frequent sight with populist and nationalist parties.
Chairman of Freedom and Direct Democracy (SPD), Tomio Okamura, who frequently makes international headlines for having his Czexit rallies and party congresses attended by Marine Le Pen or Geert Wilders, has preyed on extortions as one of the key slogans of the SPD’s political agenda.
At the same time, the electoral potential of the issue of extortions has been capitalised by Patrik Nacher, one of the most visible faces of Andrej Babiš’ ANO and one who has built his political profile on campaigning for the reduction of banking fees.
It then may come as no surprise that some of the graphs appearing after the last parliamentary election in 2017 show increase of votes in favour of ANO and SPD in the regions with some of the highest rates of extortion proceedings and unemployment.
In some of the latest developments in April, the Czech Chamber of Deputies approved pausing of the extortion proceedings as well as some of the other measures diminishing thus impact of extortions in light of the Covid-19 health restrictions, and meeting some of the recommendations long advocated by Hábl’s Institute.
Babis-led ANO deputies enabled these changes, but Nacher himself also argued in favour of financial compensation for bailiffs whose contracts/extortions are affected by the novel legislation.
While such argument completely sidesteps the issue of private bailiffs acting as entrepreneurs, which is at the core of the Czech debt crisis, it does not prevent Nacher from presenting himself as an actual fighter against the injustices of the current system of extortions.
Moreover, voting on further changes in extortion practices, which aim to bring these more in line with the EU standards, was postponed in a move backed by ANO and ODS deputies until September this year.
In many respects, this irony points to the larger issue of populism in Czechia, and by the same token in other Central European countries.
A widening chasm
In his well-known “On Populist Reason”, analysing possibilities of defining populism, political theorist and philosopher Ernesto Laclau writes of “social demand” created by concrete pressing social issues such as lack of housing opportunities in industrial cities.
If the situation with pressing “demands” remains unchanged for long enough, “there is an accumulation of unfulfilled demands and an increasing inability of the institutional system to absorb them […]. The result could easily be […] a widening chasm separating the institutional system from the people”.
It appears that the situation with the system of extortions in Czechia is a case in point of such a chasm, and one that is skillfully exploited by populist politicians for that matter.
People in extortion proceedings are not only used as a business commodity, but their voting potential is being nurtured by those politicians wheeling the system which created their condition.
One pressing question which remains to be answered is the longevity of this vicious cycle, i.e. that of recycling the political potential of the Czechs in extortion proceedings.
There are zero prospects for half of these people to ever have normal jobs or live normal lives again. While this should present a warning sign for a populist surge, instead, it remains an opportunity for collecting unfulfilled demands.