The Situation and Role of Small Central European States and Nations in a Globalised Europe

The Example of the Czech Republic

by Radek Vogl

An unbelievable twelve years have elapsed since the former socialist bloc disappeared and with it the structure of economic and political relations that existed between those states. In just a few months the free market economy or capitalism spread through 300 million people, people who have great illusions but no concrete experience. All this gave a green light to globalisation which formerly had been restricted by competition between the Soviet Union and the USA. This process should also be looked upon as an opportunity for the Czech Republic for it is clear that the main engine of development for small countries without raw materials is foreign trade. Liberalisation, privatisation and entry into the EU ought to guarantee a powerful development of the Czech society. The European Union has been considered a big brother that would help should the Czech Republic run into any problems and for this reason all Czech Republic governments have been and still are pushing for entry into the EU at the earliest possible date and argues along the following lines:

1 Strengthening of its international position and the security of the Czech Republic

• The Czech Republic will become a member state of the most important economic group in the world. Entry to the EU will therefore do away with all obstacles and barriers to Czech exports. As a very export oriented country the Czech Republic will receive very preferential trade treatment.
• EU entry will help the Czech Republic to decrease the geopolitical risks connected with its geographical position between Germany and Russia. As a member state the Czech Republic could influence the process of creating a European Germany and also developing partner relations between the EU and Russia.

2. Economic help and advanced legislature of the EU will support the development of the Czech Republic.

The Czech Republic as a member state could use financial resources of the EU. This subvention should total about 1.9-2.5 billion US dollars annually, which represents around 2.9-3.9% of GNP for 10 years as a minimum. This economic help will support a fast rate of economic development and balance living conditions between the Czech Republic and the advanced EU states.

3. The undertaking of entrepreneurial and social legislature with the inflow of foreign investment will contribute to a fast increase in living standards and economic development in the Czech Republic.

4. The possibility of Czech citizens being able to work in the EU.

However, the reality is a different one to wishful thinking.

Existing entry negotiations with the EU create new facts and problems, especially concerning direct financial donations from the EU to the Czech Republic. Expected financial help to the value of 1.9-2.5 billion US dollars looks increasingly unreal. Czech agriculture could expect only subventions to the value of 25% of present subventions granted by the EU. Though negotiations with the EU are not yet finished, there is even a possibility that the Czech Republic will be a net donor to the EU.

Another very important advantage of entry to the EU is supposed to be free movement of the Czech labour force. However, this right will be, according to negotiations with the EU, limited for a period of 7 years to Germany and Austria. Neighbouring countries are afraid of an influx of cheap labour.

After the transformation of our state-ruled economy into an ultraliberal market economy and one of total privatisation the Czech economy has stagnated. Only now is our GDP higher than in 1990. The Czech government has limited the possibility to change this situatioina and influence the economy of our country, and this is also due to EU restrictions. One example is the effort by the social democratic government to revive the iron and steel combines in regions with high unemployment. The EU, however, has not recommended it as a result of the entry agreement between the EU and the Czech Republic.

Many EU directives contain virtually no rights. The Czech Republic economy is badly in need of more freedom in order to be able to develop. Otherwise backwardness compared to the EU will remain.

The most important problem concerning Czech entry to the EU is the unequal relation between domestic wages and prices and those of the EU. Average Czech income is about 500 Euro a month and the domestic prices correspond to these wages. When the Czech Republic enters the EU and domestic prices increase to the level of EU prices, the result could be catastophic for ordinary people whose wages remain stagnant. Experiences of German unification show that it will take a long time for East Germany to reach the level of West Germany. For the Czech Republic this process will be even longer because the country cannot expect big financial help as was the case for East Germany.

Conclusion

On the basis of these experiences with the EU it is possible to say that their present proposed integration conditions are less favourable than in the case of countries which have entered before. Taking these facts into consideration the support of Czech citizens for entry to the EU is diminishing. Only about 40% are now in favour, 20% are against, while the rest has no opinion.

It is evident that it is necessary to build a new Europe in the basis of broad democratic principles which will provide optimal advantages for states wanting to join. Such a Europe should guarantee a dignified life for all Europeans and national identity. In my opinion the future Europe should also be based on the principles of the Conference on Security and Cooperation in Europe that took place in Helsinky in 1975. Those principles were:

1 Sovereign equality; respect for the rights inherent in sovereignty

2 Refraining from the threat or use of force

3 Territorial integrity of states

4 Peaceful settlement of disputes

5 Non-intervention in internal affairs

6 Repect for human rights and fundamental freedoms, including the freedom of thought, conscience, religion and belief

7 Equal rights and self-determination of peoples

8 Fulfilment in good faith of obligations under internatiional law

So let us discuss on this basis and seek solutions and alternatives. I believe that Switzerland with its direct democracy and tradition of cooperation with different nations could be such a model for cooperation in Europe.