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Czech President Sounds Alarm Over EU Movement

The European Union is marching in the wrong direction: toward regulation, standardization, and homogenization, and away from free markets, freedom, and democracy, according to the president of the Czech Republic.

“I’m afraid that the Americans do not see the EU’s accelerating drive towards the social democratic—and I would say more social than democratic—European superstate,” Vaclav Klaus told students, faculty, and friends of Chicago GSB at a Distinguished Speakers Series event at the Hyde Park Center April 26.

Klaus, whose country formally entered the EU in 2004, said the EU is shifting radically from its original goal of intergovernmental-ism to supra-nationalism. Having lived under Communist authority, Klaus said, he is more sensitive to this movement.

He called what he has seen and heard of American attitudes toward the EU “almost naive.” Americans probably believe that “the best way to achieve peace in Europe is by uniting it,” Klaus said. “I do not agree.” It is a “wrong excuse for building institutions that tend to restrain freedom and democracy.”

In the Czech Republic, it has been easier to fling open the doors to capitalism and free markets than it has been to political freedom, said Klaus, an economist and previous Czech finance minister and prime minister.

While the Czech Republic hasn’t reached the ideals of economist Milton Friedman and Chicago-style economics, it has thrown off the shackles of a state-owned economy, which Klaus called “a great achievement.” Through privatization of businesses the Czech Republic has become “a normal European country.”

“I always say that my hero, Margaret Thatcher, had to privatize three or four firms a year; we had to privatize three or four firms an hour,” he joked.

Another challenge was holding down inflation, because “we actually liberalized prices, prices that were frozen for 40 years, out of touch with economic reality.”

 —Mary Sue Penn