The ruling right-wing party in the Czech Republic, the Civic Democratic Party (ODS), suffered huge losses in regional and upper house elections, with the Social Democrats and Communists gaining a significantly greater share of the vote.
The ODS has been losing support due to the implementation of austerity economic policies, whilst also being embroiled in corruption scandals.
Czech GDP has now fallen for three successive quarters, with the Finance Ministry estimating that GDP will decline overall by 0.5% this year. Even the national bank's recent decision to cut base interest rates to just 0.25% has failed to breathe new life into an economy that is suffering from the government's austerity drive.
The Czech government has controversially introduced austerity legislation that includes increasing VAT rates by 1 percentage point and cutting social benefits. This is further depressing demand and economic growth,, which is leading to a decline in political support for the ODS.
The ODS won just 12.3% of the vote, while the Social Democrats gained 23.6% and the Communists 20.4%.
However, support for the Social Democrats, who have also been connected to corruption scandals, is also significantly down from four years ago when they gained 35.8%.
The major beneficiary of the elections were the Communists who have opposed the austerity measures of the government and considerably increased their support from four years ago.