TOP INTERVIEWS Interview with H.E. MR ŠPIDLA Prime Minister of the Czech Republic Prague, 23rd October 20 You are heading a new government and there are currently many issues on the political agenda. What do you consider to be the top priorities on your agenda? We have three priorities on our list for the near future: the first one is the further development of education and science; the second one is the accession to the European Union; and the third one, which was given by destiny, is the reconstruction of our country after the tragic floods. Are these sorted in the order of importance? All three are probably of the same importance, but in a historical view the most important issue at the moment for us is the accession of the Czech Republic to the EU. The most important for this is the maintenance and development of competition and we want to stress the intensity and quality of this development, which should not just be accidentally. Speaking about competition, the Czech GDP had a strong growth in 2001. What are your expectations for this year? It is evident that during the past two years the Czech Republic had a faster development than the rest of Europe. I believe that the main reasons for this consist in the fast transformation of our economy. Also the flow of foreign investments is a very important support of the system, which I believe to be connected with the stable economic and social environment in our country compared with the current world context. I believe that an economic growth of around 2.5% should also be maintained during the next two years. Two important elements of this growth are on one hand, as you just mentioned, the inflow of foreign investments and on the other, a sustained domestic demand. How will these two elements evolve in the near future? The Czech Republic is dependent on an economic and social balance, which is a balance between exports and the domestic market. A consequent part of our growth is connected with the external economic expansion. It is very important to mention that for years our productivity growth has been more important than the increase of wages. We also try to control inflation, which we manage to keep at a certain level. What are your views on the privatization process in the country? And do you see it as a way to attract even more investments in the near future? We can state that the privatization process in the Czech Republic has been carried out for a while now and that it is nearing its end. Furthermore, the private sector takes up a larger part here than for instance in France. Railways and CEZ are the only areas, which remain In the hands of the state. For CEZ, we are trying to change it and make it a state owned joint-stock company. There are also some other smaller companies, for which privatization did not go well, in the hands of the state. We will try to privatize these companies, such as for example the chemical company Unipetrol, the administration of airports and two coal companies. The private sector now takes up a very large part of the Czech economy. Our goal is to complete the privatization of the remaining companies, but we have not yet taken decisions in the areas of electrical energy and coal mining. Regarding the railways, we believe that it will become a public joined owned company so that we can sell some parts of it on the financial market. Concerning the inflow of foreign capital, the reasons are several and clear. Overall, we can say that it is very advantageous to invest here, but there are also other factors in the Czech Republic. The first reason is the high quality of the Czech workforce. Transport infrastructure is also very good although it still needs improvements. We have developed the telecommunication system, which is now better than the European average. Our country has a stable political environment, but also a stable social environment, because the number of days striked is very low. Also, wages are five times lower than in Germany and also lower than in Poland for instance. Furthermore, the system of investment incentives, which was created together with the European commission, is stable and functions well. Last but not least, CzechInvest, which is a state agency aiming at attracting foreign capital, is very effective and has unsurprisingly won twice in a row the award of best investment agency in Europe. Will CzechInvest and this incentives system be continued in the future? I believe that we will carry on with the incentives system and this is why we developed them with the European commission so that this can be continued after our country's accession to the EU. I also think that CzechInvest is successful and therefore does not need any changes. One reason I could add is that, as far as the business world is concerned, the Czech Republic is already considered as part of the EU and once it actually will be, it will be a new source of development for our country. Speaking about the EU, a lot has happened during the past two weeks: the European Commission announced that ten countries including the Czech Republic would be able to join the EU, the Czech parliament passed a bill allowing the use of a referendum for this issue. What is your view on the current status of the negociations and what still remains to be decided upon? I believe that the negotiations have advanced a lot and they will advance again tomorrow. The chapter of free market has already been closed. All the other chapters have been more or less accepted, except for the agriculture chapter and a small part of the transport chapter. There is also the important question concerning the institutions, which still remains open. I would say that this is a complicated matter, but there are no obstacles, which cannot be overcome. France is increasingly a partner with the Czech Republic, as was shown by the investments of Société Générale and PSA. How do you view your cooperation with France? I am glad that the French have discovered the Czech Republic and that they have decided for the Czech Republic as a business area. Furthermore, I know that the ones, who have decided for it, are quite happy about it. As far as the French investments are concerned, I believe that it is going well. For example, Renault Karosa is a very interesting cooperation, Vertex is also an interesting investment and we can also mention automotive parts that are being developed in Humpolec. How do you see this cooperation develop in the near future? Vivendi, which owns the Prague water system, is also a good example. We will still have place for new investments in the future and I still expect important investments to take place. We hope that major investors will create networks, which will attract small and medium entrepreneurs. I believe that there are cooperation possibilities with France in the energy sector as we are one of the five Central European countries, which can project, build and operate a nuclear factory. New possibilities will also arise in the airline industry, the weapons and defense industry. Between the NATO summit, which will be held in Prague, and the discussions concerning the Czech Republic's accession into the EU, there is a lot of pressure on the current government. How do you perceive your role? We will be hosting the NATO summit next month and we want to use this opportunity to promote our opinions as we see ourselves as a stable part of the European fraction in the NATO. We want to support NATO's expansion, including Bulgaria and Romania. I personally think that the expansion of the NATO is less important than the thoughts about its capabilities and role. I consider for this reason that the Prague summit will be special and not just routine. I also believe that there will be some changes and I hope that these changes will be for the better. The first reason, which is similar to the EU expansion, NATO will become so big that it will have to change the way it functions. Last year showed us that there are asymmetrical dangers. Do not understand this literally, but I believe that it is interesting to see the changes in international and safety politics, where non profit organizations are gaining in importance, such as ETA or Al Quaida, which all are non profit organizations. Ironically speaking, countries nowadays do not have a complete safety of their safety systems. And this loss of control could mean a risk for remote countries. You have had many different experiences in your life. Could you summarize these? And how are these experiences helping you in your current position? The history is slightly longer, but to keep it short: before the year 1989, I had never been a member of the communist party or any other activist organization and as a result, although I studied at university, I had to do a lot of different things. As I was young, it did not have a bad effect on me and it was rather interesting for me. At the time, I was part of the nature protection organization, which was unique as it was not a part of the communist party nor under its influence. On 17th November 1989, this organisation held a meeting and with a friend from South Bohemia we agreed that the first one to reach the microphone will hold a speech for the student protestors. I was the first one to reach the microphone and this is how I entered politics. As I was a historian, I have come to the conclusion that the Civil Forum, Obcanské Fórum, could not exist under its form. At that time, several parties were created, which were in the historical tradition of social democracy and I have to admit that I have always been a social democrat. This is was my entry into history when I founded the Social Democratic Party in South Bohemia. And I did it in a funny but successfull manner: I placed an advertisement in the newspaper asking for people who wanted to found the Social Democratic Party to write to me. This is how I entered politics and since then it has been a continuous development. Note: WINNE cannot be held responsible for the content of unedited transcriptions.