Advisor scandal and forgotten promises: Juchelka's ministerial chair starts to wobble

Czech Labour and Social Affairs Minister Aleš Juchelka (ANO) now finds himself caught in two separate problems, either of which could cost him his job: a conflict of interest involving his former adviser on European subsidies means the state budget stands to lose more than 80 million crowns, while his party's flagship pre-election pension promises have been quietly pushed off into an uncertain future.

At the heart of the first affair is the minister's adviser, Alexandra Semancová, whose company was simultaneously offering consulting services on European subsidy projects — meaning she was, in effect, sitting on both sides of the table at once. Juchelka initially defended her, describing her as "an ordinary woman" and a specialist doing her job, but that line quickly crumbled under scrutiny, not least because the European Union, which controls the funds in question, takes a far stricter view of such conflicts of interest.

It has since emerged that because of the Semancová affair, projects worth more than 80 million crowns can no longer be covered by EU funding — meaning the ministry will have to find the money in the state budget instead. Her cooperation with the ministry has already been terminated, but the Supreme Audit Office (NKÚ) has taken an interest in the case, examining whether a criminal offence may have been committed and demanding that the ministry explain how it intends to recover any resulting damages.

Beyond the personnel scandal, Juchelka is also struggling to deliver on policy. When Andrej Babiš's government took office, it promised to dismantle the pension reform inherited from Petr Fiala's cabinet — one of the central pledges of its election campaign. That meant lowering the retirement age ceiling from 67 to 65 and speeding up pension indexation by factoring in half of real wage growth instead of just a third. Both promises are written into the government's programme, but for now they remain essentially stuck in limbo.

In practice, lowering the age ceiling has little immediate effect: the 65-year cap won't actually come into play for at least another decade, and those who would have retired at 67 are currently three decades away from that age. Real wage growth driven by the inflation crisis also won't feed into the indexation formula next year either. Even so, ANO had presented these measures as urgent relief for pensioners "robbed" by the Fiala government — and the ministry's current position now looks considerably murkier.

Both the lowering of the pension age ceiling and the boost to indexation have been postponed, folded instead into a broader pension reform that is also meant to cover early retirement for workers in physically demanding professions. That part of the reform, in turn, hinges on data from a new unified monthly employer report — a system Juchelka inherited from his predecessor, Marian Jurečka (KDU-ČSL). Its rollout has so far been plagued by glitches and has caused more headaches than benefits, though it is expected to eventually become a valuable source of data on Czech employment.

Another prerequisite for reforming benefits for demanding professions is cooperation between the labour ministry and the health ministry on data-sharing and analysis — groundwork also laid by the previous Jurečka-Válek tandem. But the process is far from simple, and trade unions are set to weigh in heavily on the discussions, which is unlikely to speed things up.

All told, Juchelka's plans to push through a "grand" pension reform next year — now the vehicle on which his key promises depend — look overly optimistic. Experts, meanwhile, continue to warn that unwinding the Fiala government's reforms carries serious economic risk and could significantly undermine the stability of both the pension system and public finances as a whole.

Tellingly, the one pension reform that is well thought-out and welcomed by experts — the overhaul of the third pension pillar — is being championed not by Juchelka but by Finance Minister Alena Schillerová (ANO). The combination of a multimillion-crown personnel scandal and stalled delivery on high-profile campaign promises leaves the minister in a deeply uncomfortable position — one that could prove politically costly.

Around Prague, based on reporting by seznamzpravy.cz