Czech government refuses to join EU’s planned fiscal compact

The Czech government has refused to join the European Union’s planned fiscal compact which paves the way for a closer coordination of fiscal policies within the bloc. At an EU summit in Brussels on Tuesday, Czech Prime Minister Petr Nečas cited “ratification issues” as the main reason why the country will stay out of the pact, as the only EU member state besides the UK. The Czech refusal has already caused a stir on the domestic scene as Foreign Minister Karel Schwarzenberg said the move would harm the Czech Republic’s interests. Jan Czech Radio’s former correspondent in Brussels, Ondřej Houska summed up the reasons Prime Minister Nečas gave to back his decision.

Petr Nečas, photo: CTK

“The prime minister mentioned three reasons: first, that he had no mandate to sign the treaty because it’s unclear how the ratification process will proceed in the Czech Republic. President Václav Klaus publicly declared his unwillingness to sign it, and in order to ratify the treaty in the Czech Republic, the president has to put his signature to it.

“The second reason was that the countries with their own currencies won’t be able to attend every summit of the euro-zone member states, and the third reason was that the Czech Republic wanted to stress the debt criterion in the sanctions process. Currently, the prime criteria in the euro-zone are based on excessive deficits procedures, and Czechs also wanted to include debt.”

Do you think these are the real reasons for the rejection of the treaty by the Czech prime minister? Some commentators have noted for instance that the ratification issues don’t make much sense as it’s the prime minister’s responsibility to ensure the treaty would be ratified…

Photo: Sanja Gjenero / Stock.XCHNG

“I don’t understand reasons two and three, that is the euro-zone summits and the debt criterion. Poland, Slovakia and other countries had similar objections but why they were satisfied and the Czech Republic is not, that’s utterly incomprehensible to me.

“As far as the ratification process is concerned, it’s up to constitutional lawyers to say what is in line with the Constitution and what’s not. But as you said, if there is political will to sign a treaty, you can sign it. The Czechs adopted the Lisbon treaty and other deals. In my view, the real reason is fear among senior Civic Democrats of President Václav Klaus’ influence inside the party. They are probably concerned that the president could split the party on this issue.”

What does the decision not to join the fiscal treaty mean for the Czech Republic?

“It’s hard to say right now. The treaty as such is practically useless. There is practically nothing new in the treaty that is not already included in existing EU legislation. The strengthening of the sanctions was agreed at the end of last year in legislation known as the Six-pack, and no one raised any eyebrows at the time. The treaty is also useless in solving the current crisis.

Václav Klaus, photo: archive of the Czech Government

“But it could be potentially very dangerous not to join the treaty because 25 countries agreed to ratify it, and who can guarantee that in some two or three years’ time, these countries won’t agree on other issues as well, for example internal market rules and so on. So being outside this club could be potentially very dangerous for the Czech Republic because we could end up on the sidelines.”

The debate in the Czech Republic about whether or not we should join the pact is not over. The foreign minister, and head of the coalition TOP 09 party Karel Schwarzenberg came out very strongly today against Mr Nečas’ decision, and said it harmed the country’s interests. Do you think it’s likely that the government will reconsider its decision?

Karel Schwarzenberg

“First of all, I fully agree with the statement that the decision harms Czech interests. From diplomatic sources I know it will be nearly impossible to join the treaty in March when the fiscal compact will be signed. So an eventual reconsideration could come but later; the obvious date is March 2013 when the second term of President Klaus expires. So we will see what happens then because from my point of view, it’s highly improbably that the TOP 09 party would cause the fall of the government. It would be for the fist time if I’m not mistaken that a Czech government would fall over a European issue. Generally speaking, the EU is not such a big topic in the Czech Republic and I can’t imagine that TOP 09 would cause the fall of the government over an EU issue.”