German and Czech leaders Angela Merkel and Petr Nečas praised the strength of their bilateral relations and respect for each others positions over such thorny issues as nuclear power, under-pressure electricity networks and the European Union’s fiscal discipline pact.
Chancellor Merkel was in Prague for a fleeting five-hour visit that included a stop at Prague Castle to see head of state Václav Klaus and later a discussion about European issues with Czech students at Prague’s Charles University Law Faculty, flanked by Prime Minister Nečas (Civic Democrat, ODS).
The meeting was officially held to mark the 20th anniversary of the declaration of the Czechoslovak-German Declaration of Good Neighborliness and Friendly Cooperation and the follow-up declaration on Mutual Relations and Future Development five years later with the Czech Republic. The two declarations were aimed at drawing a line under past hostilities and suspicions in the context of new post Iron Curtain relations.
“Relations have developed very positively in the last 20 years,” Merkel commented, paying tribute to the efforts in this direction, and main driving force before behind the declarations, former Czechoslovak and Czech president Václav Havel. She described Havel as a “significant Czech president and European.”
But tensions between Prague and Berlin have developed in recent months over Germany’s attempts to coral EU states into a new fiscal partnership, with Britain and the Czech Republic refusing to sign up, disruption to the Czech electricity network due to surges in German wind power, and the two countries diametrically different directions on nuclear power. Germany is phasing out nuclear power by 2020 with the Czech Republic seeking to build two new nuclear reactors at its current Temelín plant and perhaps another one later at Dukovany.
No horse trading
Both leaders sought to paper over the differences, saying they respected each other’s views. They rejected any suggestion by one questioner in the post-meeting press conference that any deal had been done under which Germany accepted the expansion of Temelín in exchange for the Czech Republic eventually joining the EU’s fiscal discipline pact. “I have never heard of such speculation,” said Merkel. “The answer is no, simply no,” she replied.
Nečas said that while the Czech Republic had refused for now to join the fiscal discipline pact, it was on course to meet the demands of curbing its annual budget deficits with Berlin and Prague’s broader economic policies firmly in line. “Our budget deficit was 3.7 percent of GDP last year, this year it will be 3.5 percent and next year 3.0 percent. Our overall level of debt to GDP stands at 41 percent, so we are be below the Maastricht criteria on these points,” the Czech leader said, referring to the conditions for adopting the single currency euro. “I would say that fiscally we are fulfilling it [the pact],” he added.
Merkel praised the Czech government steps and underlined that it still left the door open to membership of the fiscal pact. “The Czech Republic will fulfill the 3.0 percent deficit in 2013 and will be a model for other European countries,” she said, adding that the German priority was for all the members of the eurozone to sign up to the fiscal pact.
Power grid problems
On the problem of German renewable electricity power surges impacting the Czech grid because German internal power lines can’t cope with shipping power from wind farms in the north to industrial and household demand in the south, Nečas said “there is a will on both sides to solve this problem.” The Czech PM repeated that his government was not looking to put in place technical devices that would deflect the German power surges, saying that the overall aim was to encourage a united European energy market not to start splitting it up.
The German Chancellor said that her country was seeking to speed up the administrative process so that needed power lines could be completed a lot faster. When questioned, she said there had been no talk of German financial contributions to help the Czech electricity grid to cope with German power surges through its territory. Demands for such contributions have been raised in the past by top Czech energy managers such as former head of state electricity company ČEZ, Martin Roman. Managers of state grid company ČEPS have also warned that steps to deflect German power surges will have to be taken if the problem worsens or if Poland seeks to divert German power surges from its territory.
More broadly, experts comment that close economic ties between Prague and Berlin have not been reciprocated in the political sphere with Berlin looking increasingly to Poland for close cooperation in Central Europe and the Czech Republic taking a similar line to Britain in Europe.
More differences between Nečas and Merkel emerged in a debate over the future of the European Union in front of Czech students and invited guests. The Czech PM stressed in his opening speech the legitimacy of what he described as a “variable geometry” Europe where some states were allowed to forge more developed European links between themselves and others allowed to hold back.
Nečas put the stress on national governments as having the real legitimacy to represent Europeans’ wishes through the current Council of Ministers saying that the European Commission should keep to administrative and expert issues and saying that the European Parliament had not proved legitimacy. Coordination of national policies should take precedence over harmonization, he stressed, with the later only used in exception circumstances such as completing the single market and energy market. ‘I would like to erect a statue to a Polish plumber in some French squares when this takes place.’
The Czech PM complained that the EU was still lagging in creating an internal market, pointing out the services market represented 80 percent of EU GDP but two-thirds of this sector had still to be liberalized. “I would like to erect a statue to a Polish plumber in some French squares when this takes place,” Nečas commented, referring to the controversy in France about the availability of local skilled workers and whether they would be supplanted by cheaper labor from new member states. The phrase was later used in a Polish tourism campaign inciting the French to visit the homeland of the Polish plumber.
Merkel was more outspoken in her vision and support for further integration, pointing out that Europeans had to work more together to push their interests and values as the EU’s importance in the world declined. “We now have around eight percent of the world’s population and still 20 percent of its GDP, but that will get less,” she said. Merkel said she could still conceive of the European Commission as some future form of European government and said that the European Parliament had a role in supervising the greater powers and responsibilities given to the EU.