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The Czech Republic in the New, Artificially Unified Europe

English Pages, 26. 4. 2006

Ladies and Gentlemen,

Thank you for inviting me again to speak here; it is a real pleasure and privilege to have this opportunity.

Last time I gave a speech in L.A.'s World Affairs Council was in November 1997 when I was – as prime minister – at a tour lobbying for the U.S. support of the Czech membership in NATO. I tried to describe the results – both positive achievements and remaining vulnerabilities – of the rapid political, social and economic transformation of the Czech Republic. I pointed out that it was – in our case – not possible to overcome the past “by introducing a ready-made, imported, from outside delivered system. We had to undergo a difficult transformation process”. And I stressed that our task was “to minimize the non-negligible transformation costs” which were part of the process and could not be fully avoided.

As regards NATO, I said that “the transatlantic community was never connected solely with one past enemy. It was and is based on ideas, not on enemies”. And I warned that “to believe that the collapse of communism is a final victory would be very costly. I see around us new dangers, new blind alleys, new threads, new conflicts, new attempts to create “brave now worlds” based on wrong ambitions and false assumptions as in any moment in the past.”

There is no need to change these views of mine. This time I will, however, concentrate on Europe, because approaching the EU was the second most important aspect of our past 15 years. It may be surprising for some of you that I will not be very positive. I know that 50 years of the European integration process is usually – both here and in Europe – considered to be a success. To express a different view is politically incorrect, but it must be done. The rest of the world can eventually afford to look at the EU with a benign neglect. I am, however, an object of the European integration process and my way of looking at it must be sharper.

The reason for my rather unorthodox way of looking at it is probably connected with my (and our) historic memory, with my (and our) experience of the communist era. This determines my attitude to many issues. And this gives me (and us) a special sensitivity or perhaps – for other people without the same experience – oversensitivity.

What has happened in Europe since November 1997 when I was here last time? I see four main changes:

1. The EU has been considerably enlarged by accepting ten new member states, mostly former communist countries in Central and Eastern Europe. This increased the economic disparities and the transaction costs of the EU ruling and decision-making, as well of complying with these rules and decisions. It also increased the EU´s democratic deficit.

2. The EU has continued – at an accelerated speed – to expand the number of pages of its legislation which now deals with almost every aspect of human life and human activities. Of the 22 000 pieces of legislation in the EU, about 12 000 were introduced between 1997 and 2005, compared to 10 000 during the forty years from 1957 to 1997. The role of member-states and of national parliaments has been – as a consequence of it – radically diminished.

3. The ambitious attempt to accelerate the unification process by the European Union Constitutional Treaty divided Europe. It has been – to my great satisfaction –rejected but creeping unification goes on as if nothing happened.

4. The Europan common currency – the Euro – was successfully launched but I do not agree with the interpretation that the launching itself was a convincing proof of the positive contribution of this monetary arrangement to the economic development and to – however defined – social welfare in the Euroarea. The costs – demonstratable, for example, in the statistically visible economic growth slowdown since its introduction – have not been recognized. It has been politically incorrect to even suggest such a link.

I have many doubts about that development and disagree with the – now fashionable – intention to create the “ever-closer Europe”. I am against the adjective “ever-closer” as well as against the noun “Europe”. We should not speak about Europe, criticize Europe, build Europe or expand Europe, because Europe existed, exists and will exist independently of our ambitions to organize ourselves within it, to unite or divide ourselves or to make friends or enemies within it. The Czech Republic entered not Europe, but the European Union. The EU is the result of a modern political project of some European countries to do – regardless of their historical, political, economic, cultural or religious differences – some things together.

The question is, what it means to do things together? When I look back at the last half a century, I see in Europe two different integration models. The first one was the liberalization model. It was characterized by inter-European opening-up, by the overall liberalization of human activities, by the removal of barriers at the borders of the countries as regards the movement of goods and services, of labour and capital, and of ideas and cultural patterns. Its main feature was the removal of barriers and its basis was intergovernmentalism.

The second stage, which I call the harmonization model, is characterised by centralization, regulation, harmonization of all kinds of “parameters” of the political, economic and social systems, standardization of conditions of production and consumption, homogenization of human life. Its main feature is unification, orchestrated from above, and the birth of supranationalism.

I am in favour of the first model, not of the second. I am convinced that the unification of decision-making at the EU level and the overall harmonization of all kinds of societal “parameters” went much farther than was necessary and more than is rational and economically advantageous. I am aware of “externalities”, of “spillover effects” and of “continental-wide public goods”. These phenomena undoubtedly existed and exist and should be properly reflected in European institutions and legislation. However, they do not dominate. The second stage of the European integration process has been based on the false idea that they do dominate.

I consider it wrong. I suggest, therefore, to redefine the whole concept of the European Union, not just to make cosmetic changes. I suggest going back to the intergovernmental model of European integration. I suggest going back to the original concept of attempting to remove all kinds of barriers, going back to the consistent liberalization and opening-up of all markets (not just economic ones). I suggest minimizing political intervention in human activities and where intervention is inevitable it should be done close to the citizens (which means at the level of municipalities, regions and states), not in Brussels.

Europe must be free, democratic and prosperous. It will not be achieved by democratic deficit, by supranationalism, by etatism, by an increase in legislating, monitoring, and regulating us.

Europe needs a system of ideas which must be based on freedom, personal responsibility, individualism, natural caring for others and a genuinely moral conduct of life.

Europe needs a political system which must not be destroyed by a postmodern interpretation of human rights (with its emphasis on positive rights, with its dominance of group rights and entitlements over individual rights and responsibilities and with its denationalization of citizenship), by weakening of democratic institutions which have irreplaceable roots exclusively on the territory of the states, by the “multiculturally” brought about loss of a needed coherence inside countries, and by the continental-wide rent-seeking of various NGOs.

Europe needs an economic system which must not be damaged by excessive government regulation, by fiscal deficits, by heavy bureaucratic control, by attempts to perfect markets by means of constructing “optimal” market structures, by huge subsidies to privileged or protected industries and firms, and by heavy labour market legislation.

Europe needs a social system which must not be wrecked by all imaginable kinds of disincentives, by more than generous welfare payments, by large-scale income redistribution, by all other forms of government paternalism.

Europe needs a system of relations and relationships of individual countries which must not be based on false internationalism, on supranational organizations and on a misunderstanding of globalization and of externalities but on the good neighbourliness of free, sovereign countries and on international pacts and agreements.

Václav Klaus, Los Angeles World Affairs Council, Los Angeles, April 25, 2006; The Chicago Council on Foreign Relations, Chicago, April 27, 2006. (An earlier version of the speech was presented at the Bridge-Forum Dialogue, Jean Monnet Building, Luxemburg, March 8, 2006.)