A fiery Czech is poised to be the face of Europe

By Dan Bilefsky

Published: November 25, 2008

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PRAGUE: In the 1980s, a Communist secret police agent infiltrated clandestine economics seminars hosted by Vaclav Klaus, a fiery future leader of the Czech Republic, who had come under suspicion for extolling free market virtues. Rather than reporting on Marxist heresy, the agent was most struck by Klaus's now famous arrogance.

"His behavior and attitudes reveal that he feels like a rejected genius," the agent noted in his report, which has since been made public. "He shows that whomever does not agree with his views is stupid and incompetent."

Decades later, Klaus, the 67-year-old president of the Czech Republic — an iconoclast with a perfectly clipped mustache — continues to provoke strong reactions. He has blamed what he calls the misguided fight against global warming for contributing to the international financial crisis, branded Al Gore an "apostle of arrogance" for his role in that fight, and accused the European Union of acting like a Communist state.

Now the Czech Republic is about to assume the rotating presidency of the European Union and there is palpable fear that Klaus will embarrass the world's biggest trading bloc and complicate its efforts to address the economic crisis and expand its powers. His role in the Czech Republic is largely ceremonial, but he remains a powerful force here, has devotees throughout Europe and delights in basking in the spotlight.

"Oh God, Vaclav Klaus will come next," read a recent headline in the Austrian daily Die Presse, in an article anticipating the havoc he could wreak in a union of 470 million people already divided over its future direction.

An economist by training and a free marketeer by ideology, Klaus has criticized the course set by the union's departing leader, President Nicolas Sarkozy of France. The ambitious Sarkozy has used France's European Union presidency to push an agenda that includes broader and more coordinated regulation by the largest economies to tame the worst of the market's excesses.

Even those who worry about Klaus's potential role as a spoiler concede that his influence over policy in the European Union will be circumscribed, given his largely symbolic functions as president in the Czech Republic.

But Klaus's sheer will and inflammatory talk — the eminent British historian Timothy Garton Ash once called him "one of the rudest men I have ever met" — are likely to have some impact.

"Klaus is a provocateur who will twist his arguments to get attention," said Jiri Pehe, a former adviser to Vaclav Havel, Klaus's rival and predecessor as president.

To supporters, Klaus is a brave, lone crusader, a defender of liberty, the only European leader in the mold of the formidable Margaret Thatcher. (Aides say Klaus has a photo of the former British prime minister in his office near his desk.)

To his many critics, he is a cynical populist, a hardheaded pragmatist long known as a foil to Havel, the philosopher-dreamer, and a troublemaker.

Klaus declined to be interviewed for this article. His office called a list of proposed questions "peculiar."

As a former finance minister and prime minister, he is credited with presiding over the peaceful 1993 split of Czechoslovakia into two states and helping to transform the Czech Republic into one of the former Soviet bloc's most successful economies.

But his ideas about governance are out of step with many of the European Union nations that his country will lead starting Jan. 1.

While even many of the world's most ardent free marketeers acknowledged the need for the recent coordinated bailout of European banks, Klaus lambasted it as irresponsible protectionism. He blamed too much — rather than too little — regulation for the crisis.

A fervent critic of the environmental movement, he has called global warming a dangerous "myth," arguing that the fight against climate change threatens economic growth.

Perhaps his greatest ire has been reserved for the European Union. In 2005, he called for it to be "scrapped." Now, he is a vocal opponent of the Lisbon Treaty, which aims to help Europe become more of an international player, but which he argues will strip countries of sovereignty.

On a state visit to Ireland this month, Klaus incensed the government and annoyed many in his own country by publicly praising Declan Ganley, a businessman and political activist who was influential in persuading a majority of Irish voters in June to reject the treaty.

And while other European leaders have criticized a newly assertive Russia, Klaus has forged close ties with Prime Minister Vladimir Putin and recently distanced himself from the Czech government's criticism of Russia over the war with Georgia in August.