The Speech of the President of the Czech Republic during the Meeting with German Businessmen


Ladies and gentlemen,


Let me start with a quotation of the Austrian emperor Franz Joseph who said to the American ambassador: “My duty is to protect my nation against politicians.” I am also a politician, but it was said that I am a former economist and I want to speak as an economist, not as a politician.

As far as I know, there are no problems as for our economic cooperation. Thanks God. I cannot say it is the case of other foreign investments. I remember another American ambassador who told me: “Yes, it was a disaster in the case of Boeing, the investment of Boeing in the Czech Republic, a disaster.” It is a quotation by an American ambassador. So, let me tackle some very simple principles. I think that might be useful for both sides.

Of course, I know that there are approximately four thousand of German enterprises in my country and only approximately two hundred of Czech enterprises, a very interesting investment of one Czech company in the brown coal mines in Lausitz and, also a bakery group and the chemistry of our Prime Minister, who is also not only a politician, but also an entrepreneur.

Back to the principles. Of course, I am trying to attract foreign investments to my country. It is natural. But it must be reasonable for you, not for me. So what is my main argument for such an investment? Your comparative advantage. Still the level of wages in my country is approximately one third compared to Germany. It reduces the costs and might be profitable for German companies, why not. There is a substantial growth of wages, approximately eight per cent; that is without the inflation six per cent annually. After twenty per cent, maybe there will not be any comparative advantage. But you have had an open “elbow room”, so to say, for twenty years, which is good enough.

For what I think, the economic policy in my country is based on the ethics of Protestants of Max Weber, you know this, of course. Save and invest. More than that, it is also the principle of John Maynard Keynes, my favorite economist. You know that we have the lowest unemployment rate of the European Union, thanks God we have also the lowest poverty measured by the difference between the poorest and the richest and we have a very good economic growth. By the way, I am afraid that there will be a new economic world crisis again, because anywhere the economic crisis is produced by the stupidity of politicians and the stupidity of bankers. Let me remember the slogan of Bill Clinton: “It is the economy, stupid.” Do you remember? And just as Bill Clinton was the President, there were nine years of economic prosperity, nine years. Because he was not stupid.

Anyway now, and I do not tackle any concrete name of any politician in order not to be accused, you know, the first lesson of any serious economy textbook is “avoid protectionism, avoid sanctions, avoid customs”. Well, it is a paradox that plenty of politicians have not read economic textbooks, not even the first lesson.

If I, as the President, may influence economic policy of my country a little, there are some basic principles. First, the investment is to grow quicker than the domestic consumption and domestic consumption is to grow quicker than the consumption of the Government. Second, what we need is a strong currency. And third, we need to increase interest rates in order to stimulate the savings. Very simple principles, but somewhere you have a weak currency, somewhere you are populist, and that is why you prefer domestic consumption and not investments, because, dear colleagues, an investment has no voting right. Before the elections, oh, Cameron told me, when he was the Prime Minister: “A parliamentary democracy is wonderful, but there are always some elections. Either parliamentary ones or regional ones or local ones or European ones.”

In order to open the discussion, I think it would be enough because I wonder what your views, your questions and your proposals will be. And do not forget, that the Czech Republic is one of the safest countries all over the world, safer than Switzerland, for instance. If you have some investment in Switzerland, be so kind, move it from Switzerland to the Czech Republic. Swiss people are richer than the Czech people, so it will be a double advantage for you.

That is all, thank you for your attention.

Miloš Zeman, the President of the Czech Republic