Czech Republic

VI

History

For the history of the Czech lands prior to 1918, see under Bohemia, Moravia, Silesia, and the Austro-Hungarian Empire. For the history of Czechoslovakia between 1918 and 1992, see under this heading.

The end of communism in Czechoslovakia in 1989 resulted in the disintegration of the country. Free-market reforms introduced during the immediate post-communist period tended to benefit the Czech regions more than the Slovak ones. This, and greater Slovak desire for autonomy, led to problems in the federal government. The question of how much authority the federal government should have, relative to that of the governments of the two republics, became a burning political issue. The Federal Assembly’s attempts at reaching a compromise failed, and election results in June 1992 reflected the growing split between the two republics. The Movement for a Democratic Slovakia, led by Slovak nationalist leader Vladimir Mečiar, and the Civic Democratic Party, led by Czech Václav Klaus, emerged as the parties with the two largest representations in the Assembly. As Slovakia moved towards independence, Slovak deputies in parliament blocked Václav Havel’s bid for a second presidential term, and he stepped down in July. It soon became clear that no form of federal government could satisfy the desires of the two republics, despite polls that showed a majority of the country’s citizens opposed a break-up. Throughout the autumn of 1992 Czechs and Slovaks negotiated all the details for disbanding the federal government. On January 1, 1993, the Czech Republic and Slovakia emerged as separate independent states.

In late January 1993 the Chamber of Deputies elected Václav Havel as the Republic’s first president. Václav Klaus, formerly finance minister, headed the centre-right coalition government as prime minister. The government of the Czech Republic continued with aggressive plans for a market-based economy, seeking membership of the EU. In early 1994 the Czech government signed the Partnership for Peace agreement with Western nations, as a precursor to becoming a member of NATO.

In August 1995 the government’s Office for the Investigation of Communist Crimes issued treason charges against ex-politicians and security officials associated with the crushing of the 1968 Prague Spring. In September 1995 the Chamber of Deputies voted for the establishment of the Senate as the legislative upper house. The Czech Republic formally applied for membership of the EU in January 1996. In the general election of June 1996, Václav Klaus’s governing coalition lost its majority, and Klaus was forced to make a new coalition agreement with his principal opponents, the Social Democrats.

The central bank, the Czech National Bank, ordered the closure of the Credit Bank in August, after it incurred huge losses because of a bad lending policy, and the crisis in the banking system continued into September. A programme to stabilize the banking system was announced in October. The parties of the ruling centre-right coalition claimed victory in the elections to the Senate in the November elections, with the Civic Democratic Party taking over 49 per cent of the vote. Agreement was reached between the German and Czech governments on the text of a declaration of reconciliation, in December, and it was signed in January 1997.

A

NATO Membership and Changes of Government

In April 1997 the republic’s diplomatic relations with Slovakia worsened abruptly after President Havel alluded to the “paranoia” of Slovak prime minister Vladimir Mečiar, in the context of NATO enlargement. In May a financial and political crisis broke when currency speculation caused a severe fall in the value of the Czech koruna and foreign investors withdrew capital, as scandals involving defrauding of both domestic and foreign investors, aided by poor government regulation and official corruption, caused a collapse of confidence in economic policy and several ministerial resignations. Unusually, President Havel intervened personally to criticize the administration of Václav Klaus and propose a change of government. Havel announced in July that he would run for a second presidential term in 1998.

Despite its domestic policy difficulties, the Czech Republic, together with Poland and Hungary, was officially invited to join NATO in July 1997, while preliminary negotiations began for eventual admission to the EU. Disastrous flooding affected around one third of the country in that same month. A scandal over funding of his Civic Democratic Party in November finally caused Prime Minister Klaus to resign in early December 1997. A caretaker government was formed under Josef Tosovsky. In June 1998, elections to the Chamber of Deputies brought in a centre-left administration under Milos Zeman in partnership with Václav Klaus, whose support had revived in the elections. Senate elections in November 1998 produced poor results for Zeman's Czech Social Democratic Party, while strengthening Klaus's Civic Democratic Party. In March 1999 the Czech Republic completed its formal entry into NATO. Relations with Slovakia improved in November 1999 when Zeman reached an agreement with Slovak prime minister Dzurinda to settle outstanding financial matters that had existed since the break-up of the former Czechoslovakia six years before. Under the deal, Prague agreed to return 4.5 tonnes of gold to Slovakia and to write off debt worth nearly US$1 billion. The two countries also agreed to withdraw all claims to shares in each other's banks.

In December 1999 thousands of people demonstrated in Prague and other major Czech towns calling for the resignation of the government and demanding fresh elections. As the country struggled with economic hardship and widespread corruption, Zeman's minority government had become deeply unpopular. Václav Klaus's Civic Democratic Party, which continued to share power with Zeman's Social Democrats, called for Cabinet changes in the wake of a critical European Union (EU) report that blamed Prague's political inertia for the slowness of Czech preparations to join the EU.

Nonetheless, the government continued the implementation of new economic and social policies in 2000. The final settlement with Slovakia, achieved in December 1999, was ratified in May 2000; it was also agreed that the customs union between the two countries would continue until one of them joins the EU.

Later in the year, two affairs dominated the Czech political scene. In September, Austrian environmentalists blocked border crossings with the republic in protest at the impending start of operations at the Temelin nuclear plant, located in the south of Bohemia. The protests continued in October, when the Temelin reactor was started up, and beyond, and the dispute temporarily threatened to block the Czech EU bid. A compromise agreement with Austria was reached in December, pending a thorough assessment of the plant, and Temelin shut down in January and again in March 2001 for repairs.

In a separate development, a controversial media affair, sparked off by a politically biased appointment at Czech Television, provoked a wide-ranging dispute over the potential politicization of media and led to a standoff between staff and management as well as to popular unrest on a scale unseen since the overthrow of Communism. The conflict, which started in December 2000, finally ended in February 2001, with a new agreement between employees and the new administration and with the passing of new media legislation.

Prime Minister Milos Zeman resigned as chairman of the Social Democrats in April and was replaced by Vladimir Špidla, who led the party to victory in the June 2002 parliamentary elections. The elections also saw a dramatic increase in the communist vote. In July, Špidla became prime minister in a new coalition government consisting of the Social Democrats and two smaller centrist parties.

Billions of dollars of damage was done to the Czech Republic and Prague in particular in the worst flooding seen in the region for 200 years. Prague’s Old Town came close to being submerged by floodwaters in August. In December, the country received its formal invitation to join the European Union; the ensuing referendum, held in June 2003, showed overwhelming support for joining the EU among those who voted. Václav Havel stood down as president in February 2003 after more than ten years in office. However, the search for a successor was long drawn out with Czech MPs failing to come up with a conclusive decision after the first two polls. Václav Klaus was elected to the post at the third attempt. In June 2003 the majority of Czech voters (77 per cent) supported the idea of EU membership in a referendum. Following this, in May 2004 the republic became a member state of the EU. The coalition that had led the country into the EU fared badly, however, in the elections to the European Parliament that followed in June. As a consequence, Špidla resigned as both prime minister and as leader of the Social Democrats. He was replaced in both posts by Stanislav Gross, who set about creating a new coalition government (it was approved in August 2004). However, Gross resigned in April 2005 after protracted arguments over his financing of a luxury property. He was replaced by Jiri Paroubek, the former regional development minister. The elections of June 2006 did little to resolve the unsettled nature of Czech politics: a hung parliament was the result with the Civic Democratic Party winning 81 of the 200 seats and the Social Democratic Party 74. Mirek Topolánek of the Civic Democrats was appointed prime minister in September but his government quickly ran into trouble and failed to survive a vote of no-confidence in October. The president reappointed Topolánek’s newly chosen government in January 2007 after failing to find favour with the previous selection in December. In February 2008 Klaus was narrowly re-elected as president after numerous rounds of voting.