Back to blog

The impact of Czechoslovakia’s split

See blog

Readers' comments

The Economist welcomes your views. Please stay on topic and be respectful of other readers. Review our comments policy.

BB Toronto

Your source for GDP figures please? Slovakia was much closer to parity with the Czechs per capita from the 60s up to the time of the split. Your talk of subsidizing Slovakia by the Czechs is a much repeated social stereotype dating from 1918 to the 1950s. You forget to mention that the disproportionate reduction in GDP per head in Slovakia occurred after 1989 when heavy manufacturing was shutting down and the shut down of arms manufacturing was politically decided in Prague. Disappointing to see such data left out in this simplified story from an economics oriented publication. And how much money was squandered on a split which was not sanctioned by a majority of voters on each side of the border? Another omission. Even today, the anecdotes of the poor cousin get perpetuated, despite independence, and the fact that GDP per capita is higher than Hungary's and has been for quite some time? Also omitted. Were this a publication run by someone from the region, it would be understandable, as everyone claims to be better, more oppressed, more misunderstood, and their approach to minorities never takes into consideration their own history and how they were oppressed themselves by outside forces greater than themselves, which goes for each of the Czechs, Slovaks and Hungarians. But this is a British publication, and I expect higher standards, objectivity created by distance, but no. Even more of a comparison to the Spain/Catalonia situation would have been interesting to explore. What other impact did this split have on Europe, when the Czechs elections in recent years are showing far more Euroscepticism. What are the stories of hope for Europe from this split both economically and politically? If Slovakia has managed to be better off within Europe, could Scotland and Catalonia do the same? What has happened to avoid the erosion of democracy as is happening in Poland and Hungary? I think you have a much bigger story here, but maybe Brexit has also derailed the editorial staff.

zeldason

Nice piece, square in TE's sweet spot.

The auto manufacturer is Skoda, absurd to any westerner who devoured car magazines the 1970s. This small miracle in the VW / Peiich story merits an article of its own. If the multinationals supposedly went to the Czech Republic, VW's presence in Slovakia also needs explaining.

Some comment on the currency would be helpful, too. Slovakia joined the Euro in 2009, but the Czech Republic has not. Given the geography and the Czechs' early enthusiasm for all things EU, why is it not the other way round?

Chris Jankowski in reply to zeldason

The Slovak economy is less that half of the size of the Czech economy.

Generally it is hard for small economies to maintain their own currency when majority of their import/export is with a very large partner - EU in this case.

This is why Slovakia, Slovenia, Lithuania, Latvia and Estonia were so keen to switch to euro. They are each 5 million people or less.

On the other hand, the Czech Republic, Hungary (both in the 10 million people ballpark) and Poland (~38 million people) are much less keen to join euro. By floating their exchange rate they can adjust easily the state of their relatively large economies to the state of EU as a block.

Tokarian in reply to Chris Jankowski

Interesting points. I guess Ireland (with the Euro and 4.78 million people) and Denmark (with its own Krone and 5.75 million people) lend further support to your cut-off point, though Croatia (with the Kuna and 4.1 million people is a stand-out for the present)

Chris Jankowski in reply to Tokarian

Each of the three countries you cite is a different case.

Croatia is simply not ready to join euro. They joined EU only in mid 2013 and have struggled with budget deficits since. They need a few years at least to meet the five formal convergence criteria to join euro.

Ireland joined euro driven by much the same factors as other small countries. In case, of Ireland it made even more sense with its very low company rate and huge influx of US corporations opening branches and factories there specifically for EU markets.

Denmark is an interesting case. Under 1992 Maastricht treaty they had the right to ask for an opt-out. By local law they had to run a referendum on joining euro. The Danish voters said No. So, they took the option and have a formal opt-out. They are not obliged to join euro ever. After the UK leaves EU, Denmark will be the only EU member with euro opt-out. All other countries are formally obliged to join euro one day when they meet the five criteria. Denmark had another referendum in 2000 and the voters said No again. All major parties want to join euro, but the voters do not. Denmark fulfils all 5 criteria for joining euro and has done so for years. Their currency is in ERM II i.e. is pegged to euro within 2.5% band. It would make obvious sense to join euro, but the voters have the ultimate say and do not want it.

Kremilek2

This analysis is correct but it should also mention that Slovakia has adopted the Euro and talks openly about joining the European core. Unlike the Czech Republic where the support for the Euro is below 25%. Mutual relationship is probably the best in history since there are no quarrels about money anymore.