EU summit: Czech government split over pact rejection

01.02.2012 10:44

BBC: The Czech prime minister's decision to join the UK in refusing to back an EU fiscal pact has prompted an angry response from coalition colleagues.

Petr Necas said that questions still remained over the deal, approved by the EU's 25 other member states.

But Foreign Minister Karel Schwarzenberg accused him of harming the Czech national interest.

UK PM David Cameron has ruled out signing the pact but has agreed not to stop EU institutions enforcing it.

The aim of the treaty is much closer co-ordination of budget policy across the EU to prevent excessive debts accumulating.

The treaty will empower the European Court of Justice to monitor compliance and impose fines on rule-breakers.
When he initially imposed his veto last month, Mr Cameron argued that the European Court of Justice and European Commission should be involved only in agreements made by all 27 member states.

He said on Monday he still had "legal concerns" about the use of the institutions and added that "we'll be watching like a hawk" to ensure no measures would be taken to "undermine the EU single market".

His apparent change of heart has prompted some figures on the eurosceptic wing of his Conservative party to accuse him of appeasing their more pro-European coalition partner, the Liberal Democrats.

At the last EU summit in December, the UK stood out as the only EU country not to give its initial support for the deal, due to be signed in March.
Czech objections
Although other non-eurozone states, including Poland, had reservations about some of the terms of the pact, in the end only the Czechs refused to give their backing at Monday's summit.

The Czech Republic is not yet in the euro, but like the other new EU member states it is committed to joining.

Poland insisted that non-eurozone countries should have the right to take part in summits involving the 17 states that use the euro. PM Donald Tusk accepted a compromise that allowed their participation in at least one summit per year.

But, in a statement, Czech PM Petr Necas said he could not accept the deal "because of its content and also because of a lack of clarity regarding its ratification and the effective date".
However he added that changes made to the pact were "extremely valuable" and he held out the prospect of the Czech Republic joining in the future.

Mr Necas is supported by his Civic Democrat party colleague and eurosceptic Czech President Vaclav Klaus.

His stance was criticised by Foreign Minister Karel Schwarzenberg, leader of junior coalition partner Top 09, who complained that "state interests were harmed", according to CTK news agency.

The country must adopt the euro at some point in the future, and is proud of its own fiscal prudence. So what lies behind Czech reticence to sign up?”

Why Czechs rejected Euro pact

The Czech Republic was the only EU member apart from Britain to refuse to join the so-called "fiscal pact" to enforce budget discipline.

The country must adopt the euro at some point in the future, and is proud of its own fiscal prudence. So what lies behind Czech reticence to sign up?

Nicolas Sarkozy says he does not understand Czech politics. He is probably not alone.

"The Czech PM told us that for constitutional reasons he did not feel he could accede to the future treaty," the French president told reporters in Brussels.

"I'm not sufficiently familiar with the ins and outs of what's going on in Prague to understand why what was acceptable in December is not acceptable now.

"It will be a treaty among 25," Mr Sarkozy said, explaining that a Czech "maybe" had morphed into a Czech "no".
Three objections
A few hours later the Czech Prime Minister Petr Necas himself appeared before reporters to explain why the Czechs had said no.

There were, he said, three central objections: limited access to eurozone summits for those EU members who don't yet use the euro; a failure to properly address Europe's debt crisis; and the ratification process in the Czech Republic, which Mr Necas freely described as "very complicated and uncertain".

He is not wrong there. The country's influential - and Eurosceptic - president, Vaclav Klaus, has already told Mr Necas he will not sign Czech accession to the fiscal compact. So even if the Czech prime minister wanted to join it (he doesn't), the president would not let him.

A further complication is that last week Mr Necas pushed through a government decision that joining the pact could be approved by a constitutional majority or by the Czech people in a referendum.

That, said critics including his own cabinet colleagues, was incredibly disingenuous; even if the Czech people were in favour of more budgetary oversight from Brussels (they are not), simply organising a referendum could take months, possibly years.
Certainly it cannot be done by March, when the fiscal compact is supposed to come into effect.

The outcome of a constitutional vote is similarly unclear and anyway would be preceded by months of acrimonious debate in both houses of parliament.

No wonder Mr Sarkozy is confused.

Some, like the Czech foreign minister Karel Schwarzenberg, are both confused and angry.

He told reporters: "Everyone understands why the UK is against the pact. No-one understands why the Czech Republic is against it."

If, however, you have the time, patience and the inclination to delve deeper into the real reasons behind Mr Necas's refusal, the picture becomes clearer. The reasons actually have everything to do with "the ins and outs in Prague". Nicolas Sarkozy hit the nail on the head.

Mr Necas's Civic Democrats are, like Britain's Conservatives, deeply divided over Europe.

Like the Tories, the Civic Democrats are plagued by a right-wing, viscerally Eurosceptic fringe.
Election year
Mr Necas, like David Cameron, is above all a pragmatist; a moderate who must balance the interests of party, coalition and state. He must play to the Eurosceptic gallery and yet do just enough to keep his country from being sidelined in Europe.

And he must do all this in an election year - senate and regional elections in which the Civic Democrats are expected to perform disastrously.

Thousands of centre-right voters have already deserted the Civic Democrats in favour of their coalition allies, Mr Schwarzenberg's mildly pro-European TOP09.

Ultimately, as Mr Schwarzenberg points out, the Czechs may be left with no option but to sign the compact anyway. Under the terms of the Maastricht Treaty, all new EU members must adopt the euro, and under this latest treaty, all euro members must sign the fiscal compact.

"Mr Necas is just looking for an alibi - the Czech Republic has no Plan B," says Jindrich Sidlo, a commentator for the leading financial daily Hospodarske Noviny.

He explained that defending a decision to sign the fiscal compact would be politically impossible for the prime minister. Even though, in the end, it is a decision that some Czech prime minister will have to take.

By Rob Cameron
BBC News, Prague

French President Nicolas Sarkozy addresses the media during an EU summit at the European Council building in Brussels, Monday, Jan. 30, 2012Czech President Vaclav Klaus (23 Dec 2011)Czech PM Petr Necas arrives at a news conference at the European Council in Brussels (30 Jan 2012)