Thatcher's man in Prague set for second term

Czech polls: Vaclav Klaus, a pragmatic right winger, is keeping his country on the free market path

"What is the difference between God and Prime Minister Vaclav Klaus?" runs an old joke in Prague. "God does not believe he is Klaus."

Mr Klaus no doubt smiles whenever he hears it. Not a man given to belittling his own achievements, he likes to take much of the credit for what has undoubtedly been the great success story of the economic transition in the Czech Republic over the past six years.

Only slightly tongue in cheek, he saw fit last year to publish his own version of "The Ten Commandments" - the dos and don'ts of how to go about replacing clapped out-command economies with the free market.

He is now poised to do something even more miraculous: to halt the regional trend towards the return of former communists by becoming the first right- wing politician from the former east European bloc to win a second term of office.

According to opinion polls, Mr Klaus's Civic Democratic Party (ODS) is set to re-emerge as the largest party in the country's two-day general election beginning today. With the help of two similarly right-of-centre coalition partners, he should then be in a position to form the next government.

In a Czech variation of the "You've never had it so good" theme, posters advertising the ODS cause depict 20, 50 and 100 crown notes being withdrawn from a wallet: testimony to the country's newly generated wealth and the strength of its now fully convertible currency.

"We've shown we can do it," runs the campaign slogan. And with economic growth set to reach 5 per cent this year, inflation down to 8 per cent and unemployment still below 3 per cent, many Czechs agree.

"Just look at everything you see around you," said Marie Formanova, a cook, pointing to the renovated buildings, brand name stores and commercial activity throughout central Prague. "I personally am not a great fan of Klaus - he is far too arrogant - but would all this have happened without him?"

For all his talk of hard-line monetarism - Mr Klaus makes no secret of his admiration for the former British Prime Minister Margaret Thatcher - he has made sure that Czechs have been spared some of the hardships of transition suffered elsewhere in the region.

Flying in the face of his own professed beliefs, Mr Klaus, an economist during the communist era, has kept unprofitable factories open, maintained rent controls and kept energy prices low. He has also caved in to wage demands from public sector workers.

"Mr Klaus may describe himself as a Thatcherite but in reality he is a pragmatist," said Jiri Pehe, research director at Prague's Open Media Research Institute. "He has shown that he can suspend the economic reform process if he sees it is threatening political stability. Hence the absence here of a strong left-wing backlash."

With the Prime Minister championing capitalism with a human face, the opposition Social Democrats (CSSD), have struggled to latch on to a cause - particularly as they do not disagree with the fundamental direction the country is taking.

Much of their campaign has centred on calls to stamp out the corruption they say is prevalent among the current ruling elite. But while they would undoubtedly seek more emphasis on social policies, they would not reverse reforms or go back on the twin goals of Nato and European Union membership.

Apart from the right-wing, anti-gypsy Republican Party, the only real opposition to Mr Klaus comes from the Communists, who cling tenaciously to much of their old ideology. But although polls show the Communists can expect about 11 per cent of the vote, most Czechs recoil with horror at the thought of the party.

"Unlike elsewhere in the region, there is no nostalgia for the Communist regime here," said Mr Pehe. "In Hungary and Poland, the last years of Communism saw real reforms. Here we had 1968 and then 20 years of darkness. Even if the Communists here said they had reformed, Czechs would not trust them."