Czech Republic

Czech Republic The economically, culturally, and politically dominant part of Czechoslovakia, it became independent on 1 January 1993. Its economy was hit doubly hard by the transition from a planned to a capitalist economy and by separation from Slovakia, which reduced the amount of mutual trade by 50 per cent. Nevertheless, under the neo-liberal Klaus it adapted to capitalism with unusual speed, so that by 1995, around 80 per cent of the Gross Domestic Product came from the private sector. Domestic politics were frequently marked by public clashes between Klaus and Havel, with the latter trying hard to maintain a social and conciliatory spirit in the country despite the growth of competitive market forces. Owing to a number of corruption scandals and internal party friction within the Democratic Citizens' Party (ODS), Klaus and his government resigned in 1998. The ensuing elections were won by the Social Democrats under Miloš Zeman, who formed a minorty government with the tacit support of the ODS. In 2000, an attempt by the two large parties to change the election laws at the expense of smaller parties was foiled by Havel, who feared a threat to political pluralism. Economically, the transition towards liberal markets fell behind that of Poland and Hungary, as economic growth and privatization slackened.

In 2001 a row erupted between the Czech and Austrian governments, with Zeman accusing Austrians of not dealing with their complicity in Nazi atrocities committed in the Sudetenland before 1945. As the Czech Republic completed its accession negotiations for entry into the EU, this controversy highlighted the the diversity of political cultures within an enlarged EU. In the 2002 general elections the Social Democrats, led by Zeman's successor, Vladimir Spidla, emerged again as the strongest party, though the communists made the greatest gains, with 18 per cent of the vote. The Social Democrats proceeded to form a coalition government with the centrist parties, with whom they held 101 out of 200 seats in parliament.