Czech Prime Minister Petr Nečas (Civic Democrats, ODS) said in a letter published Thursday that tendencies towards protectionism are stifling one of fundamental reasons for the existence of the EU – the open internal market. Further, he says one reason behind his decision not to sign the new EU fiscal austerity agreement was that it was presented as a fait accompli to be signed within minutes.
“While every country should have the right to choose a suitable degree of integration, there must be a common basis. And that is the internal market of the EU, the principal upon which integration was based from the outset,” Nečas writes in the letter published by the Czech daily Lidové noviny.
Sixty percent of the services market in the EU remains un-liberalized due to staunch resistance by a range of sectors, which fear competition from the likes of the Czech Republic, Nečas says in the letter, though he does not mention any sector by name. “But it is the exactly a functioning internal market which for us is the absolute priority! Economically, it will bring us much more than all the lofty plans for economic centralization,” he explains. ‘A functioning internal market for us is the absolute priority! Economically it will bring us much more than all the lofty plans for economic centralization.’
At the summit of EU leaders in Brussels on January 30, apart from British Prime Minister David Cameron, Nečas was the only leader not to commit to signing the fiscal and budgetary discipline agreement — the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (SCG) — whereby signatories will be obliged to strive to balance their budgets, while the European Court of Justice (ECJ) will be granted powers to impose fines of 0.1 percent of GDP on states which fail to comply.
While the majority of the members in the Czech tri-party ruling coalition support Nečas’ decision not to sign the EU fiscal treaty, the second-largest party, TOP 09, says not signing on will damage Czech national interests and lead to the country being pushed to the periphery of the EU, which given its high dependence on exports to Eurozone countries, could have severe economic repercussions. Party chairman Karel Schwarzenberg, the Czech Republic’s foreign minister, has said he may resign from the Cabinet — presumably taking his party members with him — if the current government does not sign up to the treaty.
Nečas says the treaty is a major step towards federalism, but does not address the fundamental causes of the current problemsNečas claims protectionism is not only a problem within the EU internal market, but also in the union’s trade relations with third countries: “While the rest of the world is mutually opening up and busily trading, many European statesmen are apparently inspired by the North Korean theory of Juche,” Nečas says, referring to the communist state’s aim to be economically self-sufficient.
The Czech prime minister also claims the EU fiscal pact’s very economic basis is flawed. “If states are going to resign their freedom to vote at their own discretion, why only there where there’s an excessive deficit, but not where overall debt has exceeded the limit of 60 percent of GDP? Is it not absurd?” he says, adding that the large overall debts are at the core of the current debt crisis in the Eurozone.
Under the Stability and Growth Pact, agreed ahead of the euro’s launch in 1999, EU member states are supposed to ensure their debt does not exceed 60 percent of their GDP; according to official statistics, the majority of EU countries have failed to do so. For the 17 euro zone countries, the debt increased from 79.3% in 2009 to 85.1% in 2010.
Nečas also bemoans the fact the new fiscal pact contains no provisions to boost growth and competitiveness, while representing a major step towards federalism without addressing the fundamental causes of current problems: “Unfortunately, this is probably the worst combination that was proposed,” he writes.
Immediately after deciding not to commit to the new pact, Nečas named lack of consensus, problems at home with ratification and the fact that President Václav Klaus has promised to block national legislation to ratify it as stumbling blocks. In the letter published in Lidové noviny, he says that the very way in which the summit was conducted was also a factor behind his decision to reject it.
“During the negotiations, the heads of government received the final text, with very fundamental changes agreed upon in the corridors, and were told they must decide immediately whether they would commit to it politically. No time for consideration, analysis, consultation with experts, government, not with anyone,” Nečas complains, adding that he is not an “absolute monarch in the 18th century” who can decide for the whole nation within a few minutes. Nečas says the latest summit was by no means an exception and the practice of submitting documents at the last minute as a fait accompli has become common practice.
Nečas says that in this regards, the latest summit was by no means an exception: the practice of submitting documents at the last minute as a fait accompli has become common practice. “It’s impossible to pretend that this is a normal way of negotiating and debating such important materials,” he writes, suggesting there is enormous pressure from representatives of the European Commission and the EU Council to accept their view without questioning.
Despite his view of the fiscal pact as flawed and ineffective, and his objection to the way it was drafted and put to the summit, Nečas points out that the Czech negotiators had managed to introduce an “opt in” clause that leaves the door open for non-signatories to sign up later. For the time being, however, it looks very unlikely he use the option. “For now I don’t see that signing up would bring any benefits to our citizens,” Nečas states.