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Simeon Mitropolitski

Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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1 July 2008

Czech Republic: Prosperity and Euro-skepticism

© 2008, IRED.Com, Inc., Simeon Mitropolitski

The Czech Republic is by any standard among the most successful post-communist countries, if not the most successful. It enjoys political stability, social and ethnic peace, and, something quite important in our uneasy times, enviable and strong economic growth. Unlike some other post-communist states in Central and Eastern Europe, the Czech government looks increasingly independent toward Brussels; in fact, this independence not only doesn't reduce the country's ability to move forward, perhaps it's the key element in explaining the country's successes. Not that being successful requires being antagonistic to Brussels, but being successful requires having independent and responsible government, and one of the criteria of such independence is to be antagonistic with the EU from time to time.

The Czech Republic and the lands that constitute its territory now, for a long time have been among the most industrially advanced in Europe. Up to the start of the World War II, it was among the first few world industrial powers, surpassing economically countries like Japan, Italy, and Spain. If for some countries the communism was a period of strong industrial growth, for the Czech lands it was a period of relative economic and technological decline. The country that was once on the par with France and that had its automobile industry as early as 1895, it later had to compare itself economically with traditionally less advanced nations like Hungary and Greece. The communism's overthrow was soon followed by peaceful divorce between the Czech and Slovak parts of the federation. They both looked to the West for inspirations and integration, but moved to the EU and NATO in different speeds. The two parts joined the EU in 2004. The Czech Republic was among the first group of post-communist countries to join NATO in 1999, despite the strong Russia opposition.

Unlike many other post-communist countries, the Czech Republic was always considered as an imminent EU and NATO member. There wasn't even a talk in Brussels that there may be either EU or NATO eastward enlargement without the Czech Republic being among the first group to receive the letters of invitation. The West still felt a sense of guilt because of the prewar policy of appeasement toward Nazi Germany; this determined lower than usual level of pressure and conditionality coming from Brussels to Prague. Unlike many other post-communist countries still struggling to prove their 'Europeanness' by strictly following, at least on paper, all EU directives, the Czech population considered itself 'European' by virtue of birth. If for some other post-communist EU-hopefuls the real question was how to satisfy the EU, countries like the Czech Republic could question the very foundations of any new EU project the same way as the United Kingdom, France, the Netherlands, Denmark, or Ireland did.

Being a Euro-skeptic in Prague has its sound economic reasoning. The EU is both a free trade area and a supranational political organization. Tilting the balance of this structure toward its free trade dimension will enhance the relative weight of countries that are located strategically at the center of the main European transportation corridors, like the Czech Republic, but may have less political weight. Within a free trade area it's the market that rules. Tilting the balance of the EU toward its supranational political dimension will reduce the market incentives and will give more power to those countries that have comparative economic disadvantages but stronger political voice, like Italy or Spain.

To illustrate this principle, let's take something that deals with the investment flows among the EU countries. Right now the Czech Republic gains enormously from the fact that its workers can compete with the workers in Germany and Austria. If the market is the only factor that really matters, then the Czech Republic will rightfully expect many more billions coming from other EU countries into its strategically located industrial factories. If, however, the EU decides to deepen its integration, this relative market advantage may vanish. Countries that now feel 'outsourced' may decide to impose additional costs on countries that 'kidnap' their industries, thus eliminating their relative economic advantage. If for some new and poorer EU members 'more EU integration' means more grants and investments, for countries like the Czech Republic more EU means less certainty in gaining investments and more political conditions attached. It's of no surprise then that the Czech government is actually not too worry about the failure of the EU Lisbon treaty because of the Irish 'no' in 2008.

Czech Republic country profile:
  • Area: 78,866 sq km.
  • Population: 10.2 million (July 2008 est.).
  • Population growth rate: -0.082% (2008 est.).
  • Net migration rate: 0.97 migrant(s)/1,000 population (2008 est.).
  • Life expectancy at birth: 76.62 years.
  • Ethnic groups: Czech 90.4%, Moravian 3.7%, Slovak 1.9% (2001 census).
  • GDP per capita: purchasing power parity $24,200 (2007 est.).
  • GDP real growth: 6.6% (2007 est.).
  • Distribution of income (Gini index): 26 (2005)
  • Main trading partners: EU countries (mainly Germany), and Russia.
  • Internet users: 3.5 million (2007)
(Sources: CIA World Factbook 2008, Reuters)

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See also the directory of companies providing real estate services in, and general real estate information of Czech Republic.

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