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The Czech Republic and Its EU Membership

English Pages, 4. 10. 2006

For millions of us – in my country and in the whole Central and Eastern Europe – the fall of communism in November 1989 meant the reestablishment of freedom, of democracy and of personal liberty. We had been dreaming about it for decades. It was for us the personal liberation from the oppression of communism, from thousands of prohibitions, commands and directives, from big and small difficulties in our everyday life, from massive injustices and crimes. At the same time, it was the liberation of the whole country from the dictate coming from abroad. I would say that the reestablishment of the national sovereignty was a similarly important achievement as the individual personal freedom.

The task of the politicians who appeared at the top in that crucial moment was twofold: to use this historically unique opportunity for introducing full-fledged political democracy and maximally free and unconstrained market economy, as well as to bring the country back into the family of free and prosperous European nations.

The first steps were done quickly and efficiently. The borders were open and the people became again free to move all over the world. Central planning and its institutions were abolished. Private property was legalized. Most of unefficient, irrational and only “quasisocial” subsidies were eliminated. Macroeconomic situation was put under control. The economic reform started with far-reaching liberalization, deregulation and privatization. All of it was done almost immediately and without unnecessary delays.

A relatively small group of people was not afraid to say that the goal of our transition was capitalism and standard parliamentary democracy. This, as well as the concept of how to get there, was not brought from outside. Its blueprint was prepared by ourselves. Its implementation was achieved by our own domestic efforts, by our own political activity, and it was made possible by the existence of the political support of millions of Czechs who wanted to get rid of the past.

We knew that there was nothing to wait for. We did not have an unlimited time for unpopular and often painful measures. We knew as well that it was necessary to take advantage of the temporary weakening of various rent-seeking groups, which would – under normal circumstances – successfully fight for their own special interests and, by doing that, obstruct the needed changes.

We had to liberalize prices in the environment of a monopolistic structure of the economy and before privatization. We had to minimize inflation in the situation of excess aggregate demand and in the moment of a very sizeable loss of output. We did it by the radical opening-up of markets, by cautious fiscal and monetary policies, by the “importing” of competition through the liberalization of foreign trade and the substantial devaluation of the currency.

We privatized without having any capital and capitalists. We privatized the whole economy, not just individual firms. And we privatized businesses as we found them and not, as some of our critics wanted, after bailing them out financially first.

The “Czech way” had some similarities with the events in other transforming countries, but it was quite different from the gradualist approach used in China and in some other Southeast Asian countries.

In any case, the revolution, the moment of radical changes, is over and we have entered the era of normal development and of spontaneous evolution. When I say normal, I mean, however, normal in European terms which brings me to my today´s second main topic.

The historic dismantling of communism brought us freedom and sovereignty. Our gradual approaching the European Union, adjusting to its requirements and in 2004 formal entering into it was a process with much different characteristics than the first one. It has been bringing us less freedom, less democracy, less sovereignty, more of regulation, more of extensive government intervention.

I know that to say that is not the usual interpretation of the European integration process. What is usually seen or heard in the rest of the world is the unstructured, unanalytical, almost naive pro-integrationist argumentation. It bothers me, because I consider the marching towards an “ever-closer”, supranationalist, regulated and harmonized Europe a mistaken ambition and the misunderstanding of the true substance of European integration a dangerous intellectual defect.

The European Union is currently neither a state, nor a purely intergovernmental organization (as the Association of Southeast Asian Nations, ASEAN, for example). The EU has been, however, increasingly evolving into a state-like entity, particularly over the past fourteen years, since 1992 when the Treaty of Maastricht “crossed the Rubicon”. At that moment the inter-European opening-up and overall positive removal of barriers based on intergovernmental cooperation was replaced by excessive interventionism, standardization, harmonisation and by looking for democracy where it can hardly exist – i.e. above states.

The European Union has now its own flag, its own anthem, its currency, its bank holiday, its citizenship and its territory. It has its own ever-expanding law (the so called acquis communautaire) which includes 22,000 legal acts, out of which 12,000 were introduced between the last eight years 1997 and 2005. The European Union is a specific supranational organization also due to its supranational institutions: the European Commission, the European Parliament, which includes 732 elected deputies from all member states, and the European Court of Justice.

The recent changes – the shift from intergovernmentalism to supranationalism, as well as the shift from liberalizing and removing of protectionist barriers, to a massive introduction of regulation and harmonization – are not seen or fully understood by many. They bring us, however, heavy costs which we feel, see and pay.

To summarize, we went – in the last 17 years – through two parallel, but in many respects different processes. On the one hand we are – already and again – a normal European country. As compared to the communist era, it is a great achievement. It is not, however, what all of us were dreaming about.

Václav Klaus, Singapore, Institute of Southeast Asia Studies, October 4, 2006