Energy war under cover of worldwide crisis

The title sounds heavily, especialy when you look at latest European weather forecast and unusualy hot spring in Central Europe, but I did not find any better expression for latest development on energy field in and around Central Europe. With Czech EU presidency closing in shame and disgust, Poles are again rising their voice about energy security with fresh support from Finland. Finnish President Tarja Halonen refused to give at meeting with her Russian counterpart a blind cheque on Nord Stream pipeline project. Dmitry Medvedev also offered to G8, G20 and selected neighbour partners offer of new scheme of energy cooperation, which is - according to the first reports - going against European Energy charter, basic EU document which is kind of a counterweight of the interest of Russian Gazprom.
Russia has problems with its southern pipeline, South Stream, due to crisis there is lack of resources and also politicial support is waining in allied states (especialy resignation of Hungarian Prime Minister Ferenc Gyurcsany was blow to Russian plans). Meanwhile, there is stronger push with northern pipe. Gazprom and its German partner are seeking (after Netherlanders) French company GDF Suez to get involved in Nord Stream and bypass Central Europe and Ukraine completely.
The only obstacle (beside unclear financing of project, which is getting more expensive almost every minute) is study on environmental impact of Nord Stream in Baltic Sea. This is argument used by Swedes and Finns and it is pushing Russians to threats that they will abolish Nord Stream at all and they will build liquefaction plants for LNG.
Moscow knows very well how to play against internal divisons in the EU on energy field. Russian companies are even at times of crisis intensifying their efforts to get to downstream, as close to European customer as possible. Surgutneftegaz, company close to Kremlin, used fragile political situation in Hungary to get 21 % of Hungarian giant MOL. There are talks that Lukoil is searching for refinery capacities through acquiring shares in Polish PKN Orlen and here in Prague there is almost no week when we in media would not get invitation to concert or reception sponsored by any Russian energy company.
EU was able to answer only with deal signed with Ukraine to overhaul Ukrainian pipeline system. This deal angered Kremlin quite a lot, but it is not that kind of united response on energy field Brussels should produce. Let's see what will Eastern partnership summit and EU-Russia summit bring.
Simply, in words of one Czech top diplomat: "They are very professional, very well prepared and if EU would not unite on approach towards Russia, there are going to be very tough times in dealing with Russia on energy (and any other) issue."
We should not forget even at times of political turmoil (Czech case) or economic downturn (Hungaria, Baltics) in what kind of neighbourhood we are living.

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Hungarian version of this advertisement see blog: http://tudtad.blog.hu
Thanks to Andras for translating for me Hungarian original, which I expanded for general Central European purposes after (a little bit unexpected) events in Prague.

Czech crisis explained with personal details

Some friends from Poland, Macedonia, Brussels and elswhere has asked me what will happen now in Czech Republic after government was voted out. To a big extent result of vote in parliament was surprise to everybody, therefore there is still not clear plan B. The most probable scenario is that government will govern in demission until the end of Czech EU presidency and meanwhile both biggest political parties, Topolanek's ODS and oposition social democrats (CSSD) will find any agreement on untimely elections. At least, this is wish of Mr. Paroubek, head of social democrats.
Many depends on what will president Klaus do and also what party ODS do, because due to constitution, there are three chances to form government, but without clear deadlines, therefore government in demission could govern many, many months.
For Topolanek and ODS would be better to have untimely elections this summer, popularity is rising due to EU presidency, seen in Czechia more less like success.
For Paroubek, autumn or spring next year are better and meanwhile there might be, according to his plan (supported most probably by president) some kind of weak ODS government or simple technical cabinet which will not be able to make any important decisions about privatisations or reforms in health care or anything like that.
Problem is that there is not clear majority in parliament, thereforem for solution there is necessary both big parties to agree on (to have early elections is very hard to agree technically). Tuesday's vote was result of rebellion of two Green party MPs (two ladies) and two ODS dissidents, one of them, Vlastimil Tlusty, was even minister in the first Topolanek government, but they disaggreed. Rumours say that present fiance and mother of his son, also MP from ODS, was previously fiance of Mr. Tlusty, then you can guess about real personal reasons behind that.
Other ODS dissident voice, Jan Schwippel, has decided after talk with President Klaus, who is opposing proEU stance of Mr. Topolanek and they also personaly disaggree on many things (and Mom of Mr. Schwippel, who was advising him, is head of ODS local bureau at region where Mr. Tlusty is from)
As result, you can see that failure of government is result of weak majority and rebellion inside government camp, not result of any consistent policy of leftist opposition.

Bruno in Latvia, or optimistic story from crisis

Optimistic news from the midst of crisis: his name is Bruno Medveckis, is about forty years old, has bold head and real azbuka tatoo on his left hand and is not smiling. He drives taxi in Riga and speaks in one words. "Ponjal," said in Russian beign said address. "Understand."
But he did not understand and went to other place. When we clarified where I want to go, he has switched off taxameter and he drove to right place, switching taxameter properly during drive at place where he should go if he understood properly earlier. He was driving like crazy, very quickly, so my appointment was not so late. Price was ok, therefore I was shocked comparing Bruno's service with his Prague's colleagues.
Latvia has new government, which will try to save country. Estonia's Prime Minister has announced that introduction of euro is possible next year and Lithuania's politicians are fighting againts rumours about devaluation. Three Baltic countries with three open and formerly skyrocketing economies are approaching crisis differently, because of policies of their elites during last twenty years.
It is kind of model for all Europe. Even we are in the EU, our problems are slightly different. We like to consider ourselves Central, not Eastern Europe. Latvia has 15th government since regaining independence in 1991. Cuts in budget will be very painful, people got used to high standards (and loans). The same with Estonians, but difference is that - even in Estonia governments are changing quite rapidly - there is wider "economical" consensus on what is right to do. This is why Estonia has special fund from better times and no prospect of bancruptcy, even also Estonian budget is cutting for ten percent.
Baltics are kind of experimental model for the rest of EU. Flat tax, quick growth, open economies, now deep fall. Different nations, different approaches. I would wish success to all of them, their countries are very nice, but political style and leadership is totally different - and also chances to succeed in times of crisis.
New prime minister Valdis Dombrovskis has told me just hard words about future cuts and that he is prepared to be very unpopular politician (see video here). Mood is gloomy among Latvians.
But hope survives even in Latvia, where now many people just shut their mouthes and they are counting (falling) salaries and (almost nonexistent) savings and they try to figure out how to survive crisis storm.
This is why: When I was leaving Riga to airport at very early in the morning, hotel receptionist ordered taxi. Guess who was waiting for me at 4,30 a.m.. Bruno. He did not smiled, just put my suitcase in car. I put a safety belt and I was regretting that I got up so early. Normal time to Riga's airport is about half an hour, Bruno made it in fifteen minutes. And for half price of what I had paid three days earlier coming to Riga during late night flight.
The trust, the most questioned economic virtue of this global crisis, the belive that Latvians's entrepeneurial spirits survives, has remained in my head as well as business card with Bruno's mobile number in my pocket. Next time going to Riga, I call Bruno in advance.

Aftercrisis EU and future of Mr. Klaus

Preparing for trip to Riga, where new government is forming to tackle the crisis, I was wondering about heated debate from last week about new border lines in Europe - who is what from which perspective. Recent crisis has shown that new, undrawn border is emerging as well as we can expect that European union after this crisis will be different.
Undrawn border has name the euro. Common currency seems to play a role of nongeopolitical buffer zone between West and East and as proof for that we can use for example plea of Hungarian Prime Minister to ease Maastricht criteria or promises of Latvian politicians to stick with lat pegged to euro with all unpleasant consequencies like higher taxes and lower salaries in state sector. For the first time since divison of Czechoslovakia Slovaks could feel better protected from outside storm than Czechs and for the first time Poland - with exception of Kaczynski twins - is really persuading itself that national currency is not sacred cow.
But what is emerging from all the mess is a necessity to change the approach from EU perspective. There is nice piece about euroscepticism and crisis times from Gideon Rachman in Financial Times (read here) to which I would only add that one of collateral results of nowadays crisis management could be new EU architecture: more united Europe.
Consequencies are unpredictable. I had pleasure to explain to group of Catalan journalists Czech debate which was quite uneasy: Spain benefited from EU membership enourmously, doubters are only among hardline nationalists in Basque country, therefore for them was not understandable why these Czechs are not so ethusiastic about EU project.
We are not all Vaclav Klaus, this is the first point. Second, for forty years we had been receiving orders from Moscow, before that from Berlin, before that twenty years of freedom and before that 300 years from Vienna. I hope that this could at least partialy explain why we are so suspicious to anybody who tryes to impose any directive upon us and why we are looking at Brussels very carefuly even with argument that "Brussels" includes also ourselves. We know ourselves, so it even more suspicious.
Czech are commited to EU project, but we do not like to show too much enthusiasm for that (Poles call this "dirty Czech pragmatism"). But new aftercrisis situation with possibly more centralised EU governance mechanisms, more tied eurozone will be new challenge not only for our eurorealism and pragmatism, but for the whole Europe. And, fortunately, Mr. Klaus does not have chance to be elected again our president - he is serving his second and last term under present constitution. But discussions about direct presidentical elections - and change of constitution - are emerging.
But what about to offer him some interesting EU post in the new European architecture? Special envoy for climate change or special lecturer on populist affairs?

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.

Need for a new start twenty years after

Is it an avalanche? Or revolution? Or mother of all crises? It looks like that postcommunist countries between Baltic and Adriatic Seas are in the year of important anniversary going through test of crucial importance which they had not been facing through last twenty years.
Economy is shrinking, as well as number of jobs available, in many countries there are unpopular governments unable to push through reforms. Party systems are either extremely unstable(Poland, Lithuania), or extremely polarized and digged in, freezed with small chances to for profound change (Czechia, Hungary). Corruption, distrust and malpractice is common feature as well as what Vaclav Havel in times of crises in 1997 called "blbá nálada" - very hard to translate, maybe "bad mood" or "nought mood" of people.
Reform ethos, on which governments could base their reform effort twenty years ago, is gone. People in postcommunist countries were prepared to go through very bumpy road because they had seen light in the end of tunnel: euroatlantic integration, prosperity and better quality of life, free travel, free speech. And - in many cases - also promising politicians who were able to deliver at time.
But what people see know: in Baltics troika governments are changing as rapidly as names of parties and Prime Ministers, in Poland there are still (almost) no highways and politics is synonym for corruption, Hungary became famous for its debt and two young but uncompromising politicians who support deep division of society, in Czechia there is still 15 to 20 percent of vote blocked by the old-style communist party, which in last year's regional elections came back to power in coalitions with social democrats, in Slovakia leftwing populist bears fruits of unpopular, but unnecessary previous reforms of right, Romania after becoming EU member had descendend into political chaos and with Bulgaria both countries are synonym for mismanagement, corruption and organised crime. Picture of former Yugoslavia countries is a bit brighter, because there is no war, but Kosovo's future, as well as Macedonian or Bosnia's is still very uncertain.
And plus all this, people are coming to the streets to protest: in Bulgaria, in Latvia, in Lithuania there were already what we can call embryotic social protests - few thousands people in the streets. But picture is becoming more gloom, when one looks at Hungary or Romania or Poland - there is potential for much more serious unrest, unless politicians will unite and start to act. But that is, of course, very idealistic expectation.
Twenty years after the fall of communism we are again at turning point. At this time, we are not alone, we are part of broader picture, of globalised world. This is also the reason that now - in contrast to year of 1989 - nobody but us could give us a helping hand. We cannot expect sympathy from Brussels or Paris or Berlin or Washington, because they also are in troubles. Raising nationalism, protectionism and incapability of our leaders to look over horizon of four years term and proviciality are main worries - and problems to be solved. But there are no Havels and Walesas and Antals on the horizon.
The prospect of Central Europe in the year of commemoration is quite gloomy - and not only because GDP is contracting like crazy.

Eastern Davos - and how to get there

Economic forum in Polish Krynica has nickname „Eastern Davos“. Maybe it is too ambitious to call it like that but each year, when I decide how and by which way to travel to this quiet spa resort on eastern side of Tatra mountains, I experience an exercise in development of Central Europe.
It is not about the quality of discussions, which are numerous and one needs to divide himself to be at every interesting panel, it is not about receptions, which are opulent and rich, it is not about two thousands of interesting people from business, politics and culture. It is about roads.
Organizers offer transport from Krakow. But to get there by plane is almost impossible if you do not book your ticket six months before, what is for journalist hard to do. By train it is seven hours (if train goes according to schedule, which is an exception, not rule). And then three hours in bus. Therefore I vote for car.
Then detailed study of actual situation of road construction comes. And this is that development game. Forget about Poland. They only talk about building highways, their roads are bumpy and way how they drive is nothing but suicidal. I gave them many chances, but nice roads end ten kilometers behind border in Bialsko Biala.
Northeastern corner of Czech Republic is not very well reachable, because highways end hundred kilometres before border and have been under construction many years already, accompanied by corruption charges.
Slovaks are building at least highway to Zilina, where giant Kia auto company plant is situated, but to go further eastward is adventurous on narrow roads with hundreds of trucks – beside about fifty kilometers of finished highway around Liptovsky Mikulas. It is highway without external connection, that is interesting. This year I was surprised that construction site has changed and early I will be ready to go about eighty kilometers between Ruzomberok and Poprad on highway. Great! (If I survive these trucks).
But how to overcome traffic jams in between (this year around Czech Trinec and Slovak Cadca and Ruzomberok was particularly hard)? This is question in which no ultramodern GPS will help. Simply, constructions are everwhere as well as jams and as well as trucks full of goods for our developing consumerism.
Other special feature is crossing the borders. Czech-Slovak borders is still natural mountaineous barier against invasion. Beside highway from Brno to Bratislava there is no modern connection. How trucks between automotive companies in both countries will move is real mystery. Regional roads will probably look like Czech D1 main highway, connecting Prague and Brno. It is constantly under repair and constantly overcrowded by trucks from all over the Europe using Czechia as cheap transit country.
So, on one side there is development and construction going on, on the other signs of improvement are not seen on horizon.
Then finaly after nice part of journey comes around Tatry from Poprad north on, but – where to cross to Poland? If I would not have „secret“ information that nearby in Muszyna there is new „Visegrad“ bridge and crossing built, exhausted, I would have to go additional hundred kilometres. From both Polish and Slovak side is very hard to find new crossing, there are no signs on road and two years old map of Slovakia does show nothing.
So tired, exhausted and enriched by new finesses of Czech, Slovak and Polish drivers, I am in Krynica, happy and looking forward, because I (and other few hundreds) are eager to discuss new things in our bumpy, unconnected region which is under (re)construction. I find my hotel, open box with invitations and – first two invite me to panels about building highways in public-private partnership and transport at the service of business. Welcome to Krynica!

How to live with bear on your backyard - Georgian lessons

Smoke is disappearing from Georgian sky - at least from part of that, while there are reports of looting and burning of Georgian villages close to South Ossetia. At least, heads are cooling on both sides and analysts are trying to write first lessons learned from short, intensive, unnecessary and to certain extend stupid war (if wars are not stupid at all) on the South Caucasus. There are interesting views from BBC or Financial Times, for example.

I would offer slightly different perspective of citizen of country which next week will commemorate 40th anniversary of Soviet occupation.

First, there is already anecdote in Czech press: Indian chieftain is sitting with white businessman and telling him: "According to our native calendar, August is the month of rolling tanks." Specific Czechoslovak experience provoked many people to express their solidarity with Georgia even they know that it was Georgian forces who, responding to South Ossetian provocations, started this short war. Emotions are very strong.

Second, do not rely on your Western allies even they promised you help, especialy in nice words. Heads of Poland, Lithuania, Estonia and Latvia (prime minister) together with Ukrainian president has flown to dangerous war zone in one plane to express support to their Georgian colleague. This specific form of human shields was the only offer from the part of NATO and EU to Tbilisi, which aspires to join both organisation. USA have offered only consolation in words of vicepresident Dick Cheney, who warned Russia of "consequencies", whatever that means. Especialy this attitude (do not irritate Russian bear too much and if, it is your own responsibility) is dangerous in connection with negotiations about US antimissile bases in Czech Republic and Poland. Could we really get US help and cover if anything bad will happen? As illustration, look at this Cartoon from The Independent daily. It is not easy to be US ally at the edge of newly growing Russian empire. Even new reports has revealed that Tbilisi did not hear to US warning about Russian provocations.

Third: EU is as weak as are the member states. French president Nicolas Sarkozy went to Moscow with peace plan, but his Russian counterpart Dmitry Medvedev had halted military operations before negotiations with EU acting president. Russia has freedom of choice where and what to do and is very determined. EU is in crisis around the Lisbon Treaty and anyway is acting as bunch of nation states, not as one entity with clear united vision. Italy has even proposed to form coalition against too antirussian sentiments within EU. In this sense, one can agree with euroscepticism of Czech president Vaclav Klaus that EU cannot be more than free trade zone.

Fourth: Small states on the outskirts of renewed Russian empire does not have any chance against Russia one by one, but only as a group. Crazy could be action of Polish, Ukrainian and Baltic presidents, but it is against Russian "bilateral" negotiations policy. It is question how is Kremlin impressed by such group, but at least it sends a signal. This we cannot say about Brussels, Paris, London or Berlin, even I can understand that we are in the middle of holiday season.

Fifth: To have other than Russian pipelines from Central Asia is not secure anymore. We have to speed up development of noncarbon fuels in the long term, built new pipes from anywhere else in the midterm and save in the short term.

Sixth and last: To deal with Russia needs patience, goodwill, humour, craft and other instruments than army. Russians are very good in doing 19th century politics with 20th century means, but we are in 21st century. Therefore we have to rethink our policies towards Russia again and again. This is not very encouraging but so is the harsh reality of living, working and being between Brussels and Moscow.

In the Olympic shadow monster is coming

It is coming invisibly, in quiet, in the shadow of Olympic games. But it comes decisively. It is not communism as one can guess. It is economical crisis. We in Central Europe with our strong curriencies and conscious politicians still think that we are an island of stability at the sea of turbulencies. But in Baltics they already know what is it overheated economy after credit crunch.
Poland, Slovakia, Czechia live through times of unprecedent prosperity. But now there is BIG warning: Germany, decisive market for all of us, is contracting - almost about one percent in the second quarter, as preliminary estimations say, for instance in today's Financial Times.
We live through big fiesta, until now. There is a question if our economies are prepared for any kind of slowing down, hard landing is more a question for our friends in Latvia and Estonia. But what is clear is that time for reforms is over. In Slovakia, they keep what was done under Mr. Dzurinda's governments, nothing else.
Czechia has been swalowed by political infighting within weak coalition government. Reforms, light ones, were done only in health care. Now we approach regional elections and then there will be EU presidency. It is not time for reforms even if economy would be booming.
Poland has got lost in inaction of promising liberal government. No major reform law was put under parliament scrutiny during first eight months of Mr. Tusk government. Prime minister and his Civic platform party are extremely popular mainly because of extreme unpopularity of strongest opposition party, Law and justice of Kaczynskis brothers.
EU money is pouring in, banks are wary to lend to poor borrowers, credit crunch is not the issue here. But with many car makers and low salaries we became a workshop of Europe. With strong currencies even the advantage of cheap labour has disappeared. And our politicians are able only to talk about knowledge based economy, not to push through any proposals and laws, not to reform overburdened public budgets.
I am afraid that Centraleuropean fiesta is coming to an end. But (almost) nobody dares. Shopping in Germany got now so cheap!

Obama as Messiah in Europe. False or right?

"Ich bin ein Berliner."
"Mr. Gorbachov, tear down that wall."
"In this new century, Americans and Europeans alike will be required to do more – not less. Partnership and cooperation among nations is not a choice; it is the only way, the only way to protect our common security and advance our common humanity."
These are three American quotes from Berlin. First two are coldwar symbols of free world, the third one is a message in globalized century. Yes, I know, it is hard to compare highly symbolical and already many times interpreted words of JFK and Ronald Reagan with fresh and not yet digested words of 46-old Senator who might be once President of the USA. But this will not be quote for historical textbooks, I am almost sure.
Europeans have been desperate to see and hear Barack Obama like Messiah. There were about 200 000 people gathered, more than at any US rally, says Politico (my favourite online source on US politics). Europe seems to be fed up by Mr. Bush and his handling of international affairs.
But will there be any difference, if Oval office will be occupied for the first time in American history by Afroamerican?
It seems to me that not so much. Obama called in Berlin for closer cooperation between US and Europe. What does that mean for Europe? More European soldiers and helicopters in Afghanistan and Darfur, unified European position in dealing with China or Russia, stronger European voice in trade talks. I doubt that crowd in Berlin, where we could see posters like "Obama for Kanzler", was aware of what is the content of message which nicely speaking man in front of them is telling.
America has its own problems nowadays, nicely described in leading article of the last issue of The Economist. It is hard to imagine that new US president will have as a priority to improve his relations with Europe, especialy in case that leftleaning Obama should deal with rightleaning majority of European leaders, who are absorbed by their own problems with Lisbon treaty, immigrants and economic slowdown.
I have serious doubts that there are going to be a big differencies in the US-European relations after November. We live in a world, where globalisation is forcing leaders of Western world to defensive rather than offensive positions, we can see that for example in business where more and more companies from emerging economies is buying good old brands in "old world". Obama does not seem to offer any new revolutionary idea how to reverse this trend.
Even Obama is now darling not only of American, but also of European media, he still has brand of anti-free trade politicians with suspiciously often changed opinions. We should be aware of him as a leader, even he could do better than George W. Bush.
And final note for European left: Many people like to compare Obama to JFK, even he did not make A QUOTE in Berlin. But do not forget that was JFK who increased number of US soldiers in Vietnam from 800 advisors to 16 000 combat troops and who did not dare to get engaged with Soviet Union over missile base in Cuba.

Russian revenge for Czech radar

So here we are: A day after Czech Republic signed aggreement with the US about stationing of antimissile radar Czech oil companies has been witnessing decrease of input of oil in the pipe Drushba from Russia. Official explanation is as usual: technical problems. But there is no doubt that we are punished by Kremlin for our highly sensitive and political decision to underline our alliance with the US.
Fortunately, we have another pipe from West which could easily cover Czech consuption as last week has shown. But Czech companies now have to search for oil at other markets and buy it for slightly higher prices than long time contracted Russian oil from Drushba.
We are aware of Lithuanian story from 2006 with "technical problems" with their part of Drushba, after they have privatized Mazeiku refinery to Polish PKN Orlen and not to Russian Lukoil. That pipe is still empty even Lithuania has been offering help to Russians to repaire technical problems (at least Lithuanian Prime Minister Gediminas Kirkilas recently has told me that).
Czech officials stress that at stake there is Russian position as reliable business partner for EU countries, but we have not heard any strong word from Brussels up to now to support that cause.
EU common energy policy is not existing as well as "political solidarity", it seems to me. Russians are playing well they usual "divide and rule" policy, especialy in energy. They prefer bilateral talks and contracts than dealing with EU as one entity - if there is any EU common interest in energy at all. Silence from Brussels (at least in media) seems to point out that decision by Czech government to host American radar and strengthen our transatlantic relations is right.

How to make A HISTORY by the Czech way

It is hard to be blogger and journalist in classical media at the same time. Especialy when your country is going through historical change, which is not trackable on the first sight. Too much work, too much thoughts going through your had and too much doubts about the result.
This week Czech government signed historical agreement about antimissile radar being stationed in Czech Republic. Of course, there will be problem for government coalition, which rely on three deputies, to push agreement through parliament, but Prime Minister Topolanek has showed many times he and his team are skilful political pragmatics.
Historical moment is going on under the surface of daily news. If US government wants to have part of strategic project to be stationed in Central Europe, therefore it is means huge geopolitical shift - and Russians have reason to be angry: from their point of view they are loosing Central Europe geostrategicaly (energy dependence and FSB agents remain).
Quarreling with Poles about Patriots is just a game, Poles are petty traders as usual, they need a good bargain for domestic political purposes. But finaly, at least what I have heard from insiders on Polish political scene, they will accept US conditions and base with interceptors.
So, what remains? To persuade Czech social democrats (at least few of them) to support radar agreement in parliament, maybe as exchange for Lisbon treaty- Yes, this is POLITICAL BARGAIN. Czech "conservatives" have their doubts about Lisbon, Czech "socialists" about radar base. There are regional elections in November and US presidential ones. Czechs will not be able to make a compromise until then as well as the left will be waiting if - just in case - Barack Obama will not postpone or erase radar base plans at all.
Only between mid-November and mid-December there is small window of opportunity to make something with Lisbon and radar. This will be the end of history(cal moment) of shifting balance in Central Europe.

EU: closer to people or getting lost

Bloggers are not supposed to have holidays, even my ones were a bit forced under the circumstancies inside my family. While I was taking care of my two-years old daughter, Ireland decided about the future of Lisbon treaty, therefore influencing the future life of my sweetheart. No, I am do not want my daughter to by politician but she will be living in different Europe and different world. And the shape of that Europe and its role in the world is decided now.
It looks like Central Europe wants to use its influence on EU till last moment and till last eurosceptic voice. Czechs are together with Poles the other troublemakers after Irish. Lisbon treaty is not very popular document and it is not only because it is too thick to read through. It is too far away from ordinary people, which is the most probable reason why European politicians are afraid to go through Irish experience of referendum.
EU is going through phase of growing gap between so called elites and voters. It is not just feeling in eurosceptical Czechia, but through the continent. Influence of Brussels bureaucracy is not understandable for ordinary Czechs, Spaniards, Brits, Poles or Latvians. They only see free movement (not in Germany and Austria), they see some money, but for many of them even EU money are too abstract and to hard to get. All other visions and revisions are too distant for them.
EU should now look for ideas which are closer to people, for concrete projects like energy security and prices, like security issues, like credit crises. Bring EU closer to people, stop talking about vision of Europe, start discuss reality would be my advice to Brussels politicians and bureaucrats.
Of course, it is easier said than done, it is on the edge of dangerous populism, but it seems to me that this is the only way out of clench into which EU got itself through Irish referendum and possible Czech and Polish rejection of Lisbon treaty. Otherwise there is danger that EU will freeze itself into endless debates and its role in the world would be decreasing by even more quicker pace than it is doing so now.

US bases: Mild Czechs, hard Poles

It was a hard return from Balkans to Central Europe. While I was traveling through region I covered ten years ago and filling my rather sceptical views with more optimistic data about development in Serbia and Kosovo, there was going on drama around US antimissile shield bases in Czechia and Poland.
Czechia did not sign already finished agreement, because Ms. Condoleezza Rice did not find time to come to Prague as planned on May 5. Polish negotiatiors have smuggled into media news about US refusing to fulfill all Polish wishes about modernisation of Polish army. Is really something getting wrong with US military presence in Central Europe?
Not exactly. Czech government is already decided to support radar base even there is strong resistance among public and site of future US radar is at the moment occupied by so called peace activists. Two of them in Prague are even on hunger strike, but for cabinet of Prime Minister Topolanek there is now only one task: how to push ratification of treaty with US through parliament. It is not easy task, but doable. Canceling visit to Prague Ms. Rice did not help much, Czech government is looking for any signal of help with PR from US administration, but Americans are silent. And then there is question, if Czech attitude towards radar issue was the right one. Should we be like Poles?
Poles are watching that very closely. They say: we will not change our positions and demands to which Washington did not respond satisfactorily. Put in words of one of Polish diplomats, there is now chance that in Poland there will be US base is fifty to fifty there will be no one. Poles are a bit fed up with helping US in Afghanistan, in Irak, in EU or at other more or less visible fronts and getting anything for that - no special contracts in Irak, no offsets for US F-16s, no special treatment in defense cooperation. Their diplomatic skills, once called by unnamed EU diplomat as "Polish diplomatic brutality", are well known and personality of minister Radoslaw Sikorski is their biggest asset in dealing with Washington politics.
Therefore there will be drama yet to see during summer months, even some Polish journalists call negotiations "game". It will be fun as well as interesting to see it and maybe Czech politicians will get from Polish hardship some food for thought.

Do Serbs understand what is going on?

Recent parliamentary elections are clear illustrations of the name of this blog: between EU and Russia, between open politics and strange behind-the-scenese dealing. I was traveling through Serbia and Kosovo for last couple of days and comparing recent situation with what I had experienced ten or twelve years ago. It was a big deja vu and also a big experience on how you can lose good opportunity for development.
And now Serbs try to catch up with Europe. It is a difficult way, because part of their politicians seems to be persuaded that there are other ways how to develop than to cooperate with EU.
They are wrong. To make a pact with Russia seems to fit with tradition Serbian thinking that Russians are "our best friend". But if Serbs look into the history, they were always betrayed buy Russians or misused. Slobodan Milosevic got nothing from his close relationship with Moscow except some Russian arms.
Therefore it is only part of Serbian mythology that Moscow will support them. Yes, Russians will but only at case if will fit them. Remember victourious travel of Russian troops to Prishtina airport in June 1999? Where are Russians now? They left after situation was explored for their PR purposes.
Well, I hope that Serbs will finally understand how to get their country from isolation and not being tied up forever by historical myths around Kosovo. This entry is being written on Sunday, just hours before announcment of election results, so I look forward to see, how they voted with you.

Lisbon in Dublin and Prague

It seems to be paradoxical. Czech government in the middle of preparations for the first presidency of EU for next year has sent Lisbon treaty to constitutional court to prove its "constitutionality" with Czech basic law. In fact, it was sent by Senat, Czech upper chamber, where main government party ODS (Civic democrats) has clear majority.
Leadership of ODS is more eurosceptical than is European average, but it is not crazy like Czech president Vaclav Klaus. Funny fact is that core supporters of ODS, according to polls, are euroethusiats, because they are people who befit most from EU memebership - businessmen, active travelers, people with more money and will to decide for themselves.
But leadership of Prime Minister Topolanek is clear: let's decide judges if Charta of basic rights is in accordance with Czech constitution.
Irish minister for Europan affairs Dick Roche was today in Prague on debate in Czech Senate about Lisbon treaty ratification. Ireland is even more in troubles with constitutional need for referendum, which is supposed to be on June 12. But Mr. Roche personaly already persuaded wary Irish about Nice treaty, which was bigger mess than carefuly redesigned Euroconstitution called Reform or Lisbon treaty. He was probably a bit confused by debate in Senate, where everybody except ODS members spoke about support for Lisbon with small nuancies in different party lines.
His lesson-learned from Nice and from unsuccesful Euroconstitution process was that to persuade people is necessary to make gradual steps: information, persuasion, explanation, step by step. Not to send to people Bible-like-book and sit and wait like French did with constitution. Modern voters are lazy to engage themselves in political life more than it is necessary for daily business. They need executive summaries.
Fortunately, Czechs do not have to vote in referendum. Governmental propaganda is very weak, we could see it on issue of US radar base. Debate about Euroconstitution was very weak and directed by Vaclav Klaus and his pointed scepticism. There was no similar strong voice from the other side. Czechs as well as other Centraleuropeans are very happy to be in EU. But euroethusiasm, wave of support and passion for eurointegration is away. More or less we can write that EU affairs are business as usual - except presidency and constant suspicion that we do not get as much money from EU funds as possible. People tend to use pleasant things like free travel as usual normality. In debate about Lisbon treaty we should probably get back a bit and have a reflection of our Europeaness.
By the way, Marek Mora, deputy of deputy Prime Minister for European affairs has mentioned today, that some partners abroad see Czechs as well as Irish the most problematic states in connection with Lisbon treaty. Well, Poles are already done, Brits have they special treatment. Fate of the most important EU document for last decade will be decided by Irish voters and Czech postcommunist left leaning constitutional judges. Not a nice perspective.