Among the countries that regained their economic and political independence after the collapse of communism, the Czech Republic has a unique place. Most of the others have opted for some degree of modification of their original plans for social and market reforms, and have elected left wing governments dominated by reformed communists to soften the impact of radical change. The Czechs do it differently. In a decade in which the right wing radicalism of the 1980s, symbolised by Reaganomics and the Thatcherite revolution, has generally gone out of fashion, the country has a prime minister who describes himself as a "true believer" of the Chicago school of economics and swears by Milton Friedmann.
Dr Vaclav Klaus, who ends a two day visit to Dublin today for talks with Mr Bruton and Mr Spring, and travels to England to receive an honorary degree at the hands of Lady Thatcher tomorrow, is one of the few professional economists to have had an opportunity to practice on an entire economy. Relegated for most of the communist period, he refined his free market ideas in a political vacuum. Since 1989, when he became the first non communist Minister of Finance since the 1940s, he has had a major influence on reshaping the Czech economy.
He is a theorist with a strong dash of pragmatism. He summarised his belief last year thus "The transformation process is not an exercise in applied economics it has its own logic and dynamics, and the task of the reformers is to make it possible". As far as the Czech Republic is concerned, Thatcherite policies have been remarkably successful and there have been few overt signs of the social stress that has slowed up reform in other post communist states.
All but one of the EMU criteria have been met the budget is balanced, borrowing is strictly controlled, and unemployment stands at 2.8 per cent (though this figure masks some feather bedding). Only inflation has not been brought down sufficiently, but it has been reduced to 8 per cent compared to 10 per cent a year ago. Officially about 80 per cent of the state owned sector has been privatised, though this figure is deceptive since a large section has passed into the hands of banks in which the state holds a major share. The trade deficit $3 billion last year is partly explained by the large imports of machinery and raw materials and partly by the fact that exporters are not yet geared up. This State alone nearly doubled its exports to the Czech Republic last year.
With its strong commitment to free markets, the Czech Republic is in the odd position of combining its ardent belief in EU membership with a clearly defined position in internal EU politics. Dr Klaus told the Tory Party conference in Blackpool last October "I am a Euro optimist regarding the future and overall positive impact of European integration, but a Euro realist regarding our ability to unify Europe under a single ideological banner." He has argued that EMU is not a good thing unless it develops organically, and he regards the current timetable as hopelessly unrealistic. His agricultural policy, based on self sufficiency and an absence of farm subsidies, is not likely to raise problems for Irish farmers, though there will be a need for funds to help restructuring.
Enlargement is five or six years down the road, but the Czechs are already part of the ideological debate.