Czech Republic

A Czech foreign ministry section head, Jakub Klouzal, has resigned as a result of inaction following his revelation back in the summer of 2010 that the government had lost tens of millions of crowns relating to overpriced IT orders. Klouzal had alerted Foreign Minister Karel Schwarzenberg who reportedly ordered the Czech police to launch an investigation into the matter. Schwarzenberg told local newspaper Mlada fronta Dnes that he was 'rather unhappy' about the lack of investigation, adding that the 'state is incapable of fighting corruption effectively'. We have long-warned that corruption poses serious risks to the Czech Republic's long-term political risk profile. Indeed, there remains potential for further voter dissatisfaction with the quality of institutions to undermine the Czech government.

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