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4/8/09

Businessweek: Czech Political Crisis Could Help EU Treaty - by Jan Machacek

For the complete report from BusinessWeek click on this link

Czech Political Crisis Could Help EU Treaty - by Jan Machacek

The coalition government of the Czech Republic lost a confidence vote on 24 March and is expected to be out of office within weeks. Leaving aside for the moment the effect on the egocentric Czech political scene, what are the European consequences of the government falling midway through its prestigious European Union presidency? It is going to mean that during the worst economic crisis in its history, the EU will lack credible leadership for the next three months. This could have lasting effects especially for the smaller EU states and for all in the east of the bloc. After this, small and mid-size countries may never again be trusted with the current arsenal of presidential powers. Next, the EU states that want a sharper line between eurozone members and others – a form of economic and financial governance for the eurozone – will be strengthened. And if that happens, one of the first victims could be Poland, which is trying to talk its way into ERM 2 (the waiting room for full eurozone membership) as soon as possible. The Poles need allies, but a rudderless Czech Republic will be unable to articulate any position or offer them support. The way this plot line develops depends on who prevails in Czech politics. Will it be the euroskeptic President Vaclav Klaus or the Klaus-averse coalition of Topolanek's Civic Democrats and the opposition Social Democrats that may be emerging?

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