Economic analyst: public sector reforms should have come sooner

09-09-2003

The country's largest opposition party - the right-of-centre Civic Democrats - announced this week they would attempt to initiate a vote of confidence when the cabinet submits its package of public finance reforms to parliament this autumn. The Civic Democrats say the time is now ripe to bring down the Social Democrat-led government, which has a majority of just one vote in parliament. The government is under fire from both sides over the reform package: public sector workers say the reforms will affect the poorest in society, economists say they don't go far enough. One of them is Tomas Sedlacek, economics lecturer at Charles University and former adviser to President Vaclav Havel.

"Well I tend to agree with the economists of course, being one myself. The period of radical reforms seems to be over now, and this nation has got used to a very slack approach to reform. Which is why [the government] gets attacked from both sides. I think it is the role of the trade unions to be part of this debate and try to advocate the side of the weaker members of society, the [public sector] employees. On the other hand, these reforms are really not very liberal, not very radical, nothing compared to Slovakia or places like that. They definitely should have come sooner, also because the nation's willingness to adopt the changes and - as we used to say - tighten our belts, that period is gone now."

Radical reforms are of course best for businesses, for businessmen, but surely the governing Social Democrats - as a socialist party - have an obligation to the less well off of this country?

"Yes, in the given state you can only defend one against the other, unless you have growth from which both can benefit - i.e. if you manage to carry out reforms which produce a win-win situation, whereby both the socially weaker as well as the rich both benefit from that growth. Of course that's easier said than done, but it doesn't always have to stand in a contrast of one begging from the other."

The largest opposition party, the right-of-centre Civic Democrats, have threatened to use the reforms to bring down the government. Do you think this is an empty threat?

"No, I think it actually makes sense to me. The position of the current government is very weak, and it was just a matter of time or a matter of finding an excuse before the Civic Democrat party would try to overthrow the government. We have to realise that the Civic Democrats at the moment are enjoying very high popularity, they have their ex-chairman [Vaclav Klaus] as the president, who's also very popular now. So shall we see the constellation of stars is very favourable. Also in terms of EU accession happening early next year: everybody will want to be the one who steers the country into the EU. Not only because you'll be pictured in the history books, but also because it's an important time for negotiation and for being able to place your people in desired locations. So I think it's a highly attractive time to be in the government, early next year, and this is definitely a good time for them to try it."

09-09-2003