August 23, 2015

A Short (and Very Selective) Outline of Recent Relevant World Events

I have to start by mentioning that this day, the 21st August, is a very sad and distressing day for my country. Forty-seven years ago, the Warsaw Pact armies – led by the Soviet Union – invaded Czechoslovakia with the objective to crush the very promising development there, called – somewhat imprecisely – Prague Spring. Due to it, we had to wait for the coming of freedom for another two decades, till November 1989.

Many thanks for the invitation. I haven’t been to Crans-Montana for almost a decade. To be fair, I don’t want to pretend that I haven’t been invited. However, my presidential duties blocked my trips abroad in those years. Being here again, I must say that this place and its surroundings are even more beautiful than I remembered.

Let me take my rather long absence here as an advantage, as a point of departure for taking a longer term view. When I look at the current world with this perspective, my conclusion is that in spite of the fact that many things have changed since my last visit here, many other things have remained the same, just their negative aspects came to the fore. Let me differentiate these two groups of events.

I was here last time

- before the 2008-2009 Euro-American financial and economic crisis which – to my great regret – keeps to be erroneously interpreted as a market failure whereas it was a huge and inexcusable  government failure;
- before the outbreak of the sovereign debt crisis in Europe, in the so called PIIGS countries, especially in Greece;

- before the considerable acceleration of the diminishing of the American role and importance in the world (and before the rise of President Obama and his irresponsible leftist policies in the U.S.);

- before the series of “coloured” revolutions in Arab countries, sometimes called “the Arab spring”. They didn’t bring flourishing democracy there, but destabilization of countries, wars, chaos and the rise of religious fundamentalism;

- before the start of the home-made Ukraine crisis (misleadingly called the Ukraine-Russia conflict) and before a new phase of the dangerous confrontation between the West (and especially the U.S.) and Russia;

- before the appearance of the Islamic state and its victorious crusade throughout the Middle East, etc.

All these events are more than serious and they shifted the world to the worse. They are highly significant but are all of them really brand new and unexpected? Did they qualitatively change our societies? I am not sure about it. They didn’t appear out of the blue. (They didn´t happen “all of a sudden”.) Similar dangerous tendencies had been present in the world already long time ago, long time before my last visit here. I would mention the following:

- Europe had been in decline and in an overall loss of prestige and importance long before the last decade;

- the consequences of the European post-Maastricht unification policies and especially of the launching of common currency (in an inappropriate economic zone) had been there already a decade ago (some of you may remember my dispute about it with the Eurocommissioner Almunia and with Belgian Prime Minister Deheane at one of Crans-Montana Forums);

- the irresponsible American foreign interventions and attempts to export Western-type democracy into countries with different religion, culture and traditions started soon after the fall of communism;

- the undermining of freedom, democracy, and market economy under the banner of the alarmist, irrational, and fundamentally flawed doctrine of global warming had been here also;

- the freedom and democracy endangering dissemination of ideologies of political correctness, of humanrightism, of transnationalism, of feminism, genderism and homosexualism, of NGO’ism, etc. had been gaining momentum already in the first decade of the 21st century;

- the term BRICS countries was not a universally used acronym then, but the rapidly growing importance of the countries which belong to that group had been undeniable, etc.

All these topics could and should be addressed at future Crans-Montana meetings. Let me make – so late in the evening – just a few brief comments:

1. As someone who spent most of his life in a very oppressive communist regime, I feel endangered by the extremely etatist and centralistic inclinations of the current Western world – by its shrinking of freedom, by its increasing manipulation of human thinking, by its government overregulation, by its unproductive paternalism, by the growing hostility of political correctness. The contemporary European economic system is very far from a free market economy. The EU parliamentary system is not a good example of a pluralistic parliamentary democracy but an incarnation of post-democracy. The sovereignty of nations is being lost in pan-European institutions. Europe – with its gradual loss of identity, with its cultural and civilizational demise, with its economic stagnation – is part of the current world problems, not their consequence. We – in Europe – are responsible for it.

2. A new era of confrontation between the West and the East (particularly Russia) is frustrating especially for us who spent such a long time in the East, as part of the Soviet empire. We lived at a wrong side of the divided world and paid a very high price for it. We don’t want to repeat the same experience again. It would be a tragic mistake to push Russia out of Europe just now. Russia deserves to have a chance to define its new history, to find its own way, and to be an active player on the international scene. The current Western attempts to block it are very short-sighted. Above all: for the West itself.

3. I am frustrated to see the developments in the Middle East and Northern Africa. In the vacuum created by the end of communism, Islam, its dominant religion, has been turned into Islamism, and has become more and more used up (or misused) for the realization of the long-standing expansionist ambitions of a part of the Arab society, of its elites, of its hardliners, of its political activists. It becomes a real danger for all of us but it shouldn’t be forgotten that the destabilization, chaos and disruption in countries like Afghanistan, Iraq, Libya and Syria are products of unsuccessful wars, questionable revolutions, and domestic turmoil, often started, from behind the scene stirred up or at least supported by the Western world.

4. Greece hasn’t been a very successful country in the last two centuries, but it is different now. Greece has become the victim of the current irrational EU arrangements. This country – along with the euro – got economic parameters quite inappropriate for its economy, especially an exchange rate that was and is too high. It also got an entirely underserved perfect credit ranking and as a result, low interest rates. This augmented its old problems – Greek propensity to make debts.

Helping Greece out of the current debt trap has reached historically unprecedented levels. The well-known German economist, Prof. H. W. Sinn, calculated recently that since May 2010 Greece has gotten 35 times the sum Germany received after World War II through the Marshall Plan. It doesn´t help. The only feasible solution for Greece would be to abandon the euro. This unlucky country is, however, advised (or even forced) to stay in the Eurozone, to implement “reforms” and to carry out an internal devaluation which leads to a deflationary spiral. This is not a meaningful and realistic way out.

To discuss these topics in detail would ask for something more than a dinner speech. Thank you for your attention.

Václav Klaus, Notes for the Crans-Montana Forum Dinner Speech, Mont-Paisible Hotel, Crans-Montana, Switzerland, August 21, 2015.

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