Plea from Central Europe: We are not the East!

Forget about geography, important is who pays its bills in euro. These countries are more or less safe. For example, Slovakia, which intoduced euro two months ago and is even in larger scale exposed to downturn in automotive industry, has better treatment then Czechia.
So, forget about geographical meaning of the East and the West. At least this is a lesson of recent turmoil on Central European financial markets followed by latest development in politics and economics. There was raised - also due to articles in such prominent publications like The Economist and Financial Times - a question, if Western analysts are aware that Czech Republic has different debt structure than, say, Hungary and that problems of Latvia are not the same like problems of Czechia. "You cannot counter the argument that geographically, Czech Republic is in the region between Latvia and Hungary," was ironic response of one Western colleague to my question what is policy of his newspaper on which it divides Europe into West and East.
I know that Czechia is for many analyst and commentators still wild East (especially, if they ever had encounter with famous Prague's taxi drivers), but from economical and structural point of view, situation here is quite different than in Baltics or in Ukraine or Serbia. For example, we had already our banking crisis in late 90s and our Consolidation bank, which siphoned toxic assets, is quoted in recent days as one of the models for solving the problems elsewhere, especialy in the US.
We are now more part of the West than the East - politicaly (EU + NATO + possible US radar base), economicaly (look at export statistics), even socialy (English as lingua franca and all the "cultural" stuff in TV or travels). So it hurts when Western analysts put you in the same basket with Ukraine, Belarus or even Tajikistan. The work we have been doing in last twenty years is somehow dishonoured...
Euro has become new division line in the harsh times of economic crisis, as I understand from my talks with some economical analysits during last few days. From that point of view, Slovakia is even further on the West and Austria is with its indebtnes (its banks exposure in postcomm countries means that debt of Austrian banks equals its 80 % of GDP) more vulnerable then, say, Czechia. Simply, we are interconnected with the Western financial system as much as with Eastern gas and oil pipelines. We are in the middle, in the Central Europe which I would consider rather special entity than easy described part of West or East.
Czech national bank today has complained about misinformation in Financial Times and The Economist about state of Czech debt (read here). Westerners could in these turbulent times cause us real damage.
I think that part of the problem is in geography and in good old cold war divison between East and West which still prevails in heads of many Westerners (as well as in Kremlin). We can agree we have in common with others that we are postcommunist countries, but definitely we are not the East. And the question is what common economical problems has Czechia with, say, Azerbaydjan. We even have very, very different structure of mortgage debt in comparison with Poland and Hungary, where in both countries there are problems with lending in Swiss francs or in euro (1/3 of Hungarian debt is in foreign currencies). Foreign currency denominated debt in Czech market is - according to Czech natinal bank - around 0,1 percent.
Two weeks ago Czech foreing minister Karel Schwarzenberg had public quarrel with his Russian counterpart Sergej Lavrov about if we are "Central" or "Eastern" Europe. The New York Times today is on the same tone like Lavrov putting us on the East (read here).
On the other side, I can only quote Timothy Garton Ash who wrote in one of his books that there are about 16 definitons of Central Europe in which there is not included only Spain, Portugal and Norway.

Lost in realpolitics: the end of radar in Czechia

Hillary Clinton has said to Czech Foreing Minister Karel Schwarzenberg that issue of US antimissile defense program (and radar in Czechia) could be "reconsidered". Unofficially, Czech diplomats were told to be prepared for cancellation of plan for US base on Czech soil.
Next day Russian FM Sergej Lavrov has told to Schwarzenberg that Czechia and Poland (hosts of possible US missile defense facilities) are "Eastern Europe, not Central according to UN classification".
Being president of EU, it is not easy job for Czech diplomacy. Being message carrier between superpowers is even much worse (all the stuff is around Iran and cooperation between the US and Russia over Iranian nuclear program). But being nothing - in terms of international politics -, being only passive player waiting for decision of others, being shifted by decision of others, this is true tragedy.
Czech diplomats maybe had been playing wrong cards last year persuading themselves and journalists as well that question of US radar in Czechia is irreversible even after Democrat would win in the US. It looks like that Czechs overplayed (as many times during history) their willingness to attach themselves to any superpower: to France (and Europe in general) after 1918, to Soviet Union after 1945.
Now the US, last resort, is falling short of expectations of Czech ruling political elite. Disappointment hurts, especialy to those who invested heavily their political capital into the struggle over US base in Central Europe. There will be no special relations on link Washington-Prague or Washington-Warszaw. Only realpolitics.
Reapolitics. It was Henry Kissinger who said: "To be an enemy of America can be dangerous, but to be a friend is fatal." He was right, through radar (missile defense) issue Czech politicians, diplomats and journalists, who were last two years persuading Czech public that US base on Czech soil is huge gain, are given a lesson of realpolitics.
Maybe it is too early to write down another ally, Sarkozy's France is still much worse as well as Putin's Russia. But at times of global crises, of still weak Obama's administration is better to be prepared for worse and than be surprised pleasantly. Maybe, conservative ayatollahs will win June's Iranian elections so strongly and centrifuges in Natanz will work so perfectly that question of radar on Czech soil will get back sooner that we expect. But reapolitics is real.

Crisis and trust. Does Estonia has answer to all of us?

I have read two interesting pieces from two interesting ladies. Naomi Klein is in her obvious doomsayer tone describing social consequencies of recent crisis through Europe and world (read here). It is short journalistic piece, therefore nobody could expect policy recommendations beside obvious "down with capitalism and capitalists". But it is worth to read it as opposit viewpoint to other beatiful lady's work - Katinka Barysch's "New Europe and the Economic Crisis" - profound analysis of where new EU members stand in crisis and what are possibilites ahead (read here).

The prospect of Central Europe in both texts seems to be very gloomy and both are certain that we are facing change of what we can call "reform paradigm": if opening economies, following EU guidelines so strictly and doing privatisation and market reforms was the right way when old EU member states will come back to the economic nationalism, when EU solidarity is questioned in numerous issues (remember recent gas crisis). All these questions should and probably would be raised and underlined during the year when 20th anniversary of "Velvet revolutions" will be celebrated.

What strikes me is that while we are discussing more or less only economical part of crisis, there is very small part of debate about society and what I consider as basic question in the crisis: trust. After entering EU the reform pressure has stopped in almost all new member states, corruption, disbelief of voters and general "bad mood" prevailed. Until recently, good economic shape could cover that, but this year we will be facing tough decisions and questions.
And to my knowledge, situation is not the same in all ten new member countries. My Estonian colleague answered my question about why situation in Estonia is not so bad like in Latvia and why there are no public protests after government decided to cut 10 percent of all state employees: "What I have understood is that in Estonian still have some sort of belief in our government, political parties etc. Even though tough budget cuts touch everyone. If you look into figures (http://www.postimees.ee/?id=76720) the political parties in the parliament enjoy roughly the same amount of support as during the elections 2 years ago. While in Latvia none of the parties in the parliament would today cross the 5% threshold. As some analysts have pointed out the differences are in transparency and the level of political corruption," has written me Kadri Kukk (another nice lady, by the way).
So what? Estonians will be again ahead as at times of reforms, because social trust and social capital is higher? Does anybody in Poland, Czechia, Slovakia, Hungary belive that governing politicians, often considered corrupt and incompetent or weakened by scandals, are able to show us way out? Do we believe ourselves and each other (crucial condition for making business)?
Answer to these questions is for me crucial to understand what will be the impact of economic crisis on postcommunist members of EU and where is the future of our countries (being in EU or not).
Thank you, ladies.

Bizzare of Czech politics at times of EU presidency

It is a bizzarre world looking at it from Prague in these days. We have a historical chance to "play a big politics" as head of EU, meanwhile in our newsroom over heads we hear stupid debate of our deputies in parliament about Lisbon treaty, about party differencies and at the same time the world headlines are about Iran launching satellite. This is a big politics meanwhile Czech socdem opposition refuses to support foreign missions of Czech army and wants a trade-off for domestic issues.

Provinciality of Czech politics hurts. During last few years we - liberal journalists - had feeling that at least for foreign policy we could be proud of our government, defending Cuban dissidents or making issue of energy security of THE ISSUES inside the EU. Now, when we can proof some of our qualities, our politicians became a sacrifices of internal quarreling, weak government is blackmailed by opposition.

Looking back at my previous blog entry, my pessimism goes deeper and deeper: there is lack of political leadership at times of crises. As far as I know about development in other postcommunist countries, our situation is not better or worse - it is bad as bad is political stalemate in Hungary (look at interesting interview with oppositon leader Viktor Orban, who is going to be next prime minister in Financial Times), as Slovak populism or nice talks about reform without action in Donald Tusk's Poland. Our, Czech, specifics is that we are exposed to the attention of Europe because of EU presidency.
Today's debate in Czech parliament about Lisbon treaty hurts, result is not clear. This parliament session is supposed to have about 230 points. Lisbon treaty is the first one and debate goes on for fifth hour. The most probable result will be postponing vote in Lower Chamber.