Into the New Year With Fear and Trembling

You would really think the Czechs would be looking forward to 2004. After all, this is the year when, on May 1, they finally enter the European Union. True, there’s no new-and-improved Constitutional Treaty in place yet to adjust the EU to the reality of ten new members, but that’s (hopefully) just a matter of time; in any case, at least Vladimir Spidla’s government (no matter what the opinions of President Václav Klaus may be) can’t really be blamed for the constitutional hold-up.

But that’s not the case, as a pair of articles by Petr Holub in today’s Hospodárské noviny reveals. As Holub points out at the beginning of one (The More the Union Approaches, the More Czechs Are Afraid), “Half of the people think that they will have it worse [in the coming year], and the cause is what they themselves approved in a referendum – May’s accession into the European Union.”

Let’s first turn our attention, though, to his companion article on the subject of Czech consumer confidence (Fears of the EU Are Such That They Threaten the Economy – click on “Obavy z EU”). Recent surveys by the polling bureau STEM/MARK in fact show a disturbing fall in Czech consumer confidence, down over the last months of 2003 to a level last seen four years ago. Of course, that consumer confidence has taken hits in recent years – such as 9-11, and also after the floods that devastated Prague and the Vltava river-valley generally in August, 2002 – but it has always regained previous levels shortly thereafter. But now it has dropped again, this time not as a result of any fresh misfortune, but rather seemingly from uncertainty over what accession into the EU will mean. (Although admittedly, as the article adds, additional domestic concerns also are contributing, such as uncertainty over the Czech state’s ability to continue to pay for the health-care and educational systems, and, in the short term, because of the first true across-the-board increase in prices Czechs are facing with this new year, mainly the result of changes to the tax system.) Fewer Czechs indicate to the pollsters that they will be in the market for a new car in 2003, and fewer also plan to spend on their place of residence, whether house or apartment.

It is Holub’s companion article that zeroes in on what Czechs fear specifically about EU accession (this time gleaned from a poll by the CVVM public opinion organization). The greatest worries are over further price-rises, this time the result of a convergence process bringing Czech prices (which now average half of EU prices) more into line, while wages and pensions lag behind. Businesses also are worried about the increased competition full entry into the EU market will bring – from foreign firms “which have better access to appropriations from Brussels and so will have the advantage.”

Later in that article, though, Holub cites a researcher from the Vienna Institute for International Economic Studies, one Josef Pöschl (and I like the way he sets a good example by economizing on vowels in his surname), to the effect that such price-rises are not much to worry about. For example, Portugal has been a member of the EU since 1986 and prices there are still three-quarters of the EU average. The lesson actually is that, yes, there will be convergence, but it doesn’t have to be rapid.


To all of this HN editor Martin Denemark (Pretty, Irrelevant Fear – click on “Poznámka”) has a simple response: Buck up, straighten up, and enter the EU in May with your chin up! “Even if Czechs had nothing to fear, they would quickly come up with some terrifying straw-man, for they like to be afraid of something” – that, rather than prepare logically and methodically for the challenges ahead. “It’s gotten to the point,” Denemark complains, “that Czechs now fear price-rises and EU accession more than any threat to their lives or health.” It’s a shame how much uncertainty and lack-of-confidence prevails among Czechs as to their capabilities to survive, and indeed thrive, as new EU members.

Remember, Denemark says, we really had no choice but to go into the EU: EU policy would greatly influence us whether we were members or not, given our strong economic ties with current EU members (particularly Germany). So let’s just remember that those who succeed go in proud, with their heads held up high.

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