The Czech economy began to slow down in the spring of 1997, leading to a drop in state budget revenues, and Klaus’s government adopted a series of budget cuts known as “austerity packages”. There was also a currency shock. This led to a sharp drop in the popularity of the government and especially of ODS.
Already during 1996 and especially in 1997, ODS faced accusations of obscure financing through donations from entrepreneurs participating in the privatisation, which were supposed to be transferred through planted or fictitious persons.
Václav Klaus faced intra-party criticism. On 7 November 1997, Interior Minister Jan Ruml left the government and on 28 November, together with ODS Vice-Chairman Ivan Pilip, he called on Klaus to resign as party chairman. Klaus himself was in Sarajevo at the time, which is why this act was later nicknamed the “Sarajevo Assassination”.
The following day, ministers from the KDU-ČSL submitted their resignations, followed by ministers from the ODA. On 30 November 1997, the Prime Minister resigned as Prime Minister, adding that it was the resignation of the entire government. President Havel accepted it, and further political negotiations were led by the KDU-ČSL chairman Josef Lux. On 17 December 1997, the President entrusted Josef Tošovský, the former Governor of the Czech National Bank, with the task of forming a caretaker government. The new government, composed partly of members of the coalition parties and partly of non-party members, was appointed on 2 January 1998.
He is unable to substantiate his childish criticism of Brussels with arguments, and last time he even expressed his joy at Britain’s withdrawal from the European Union.
Mečiar’s era in Slovakia, which was in the spirit of a leaning towards the East, accumulated international scandals and one diplomatic dispatch after another was sent to Bratislava. Following international pressure and the mobilisation of the pro-democracy section of the public, there was pressure to turn the helm. Mečiar, too, had to submit to it, seeking to extend and strengthen his declining power.
In its programme announcement, the third Mečiar government pledged to the citizens that it would advocate integration into NATO. However, the actual policy and especially the rhetoric of the cabinet representatives pointed more towards strengthening ties with Russia. This phenomenon was caused, among other things, by the economic interests of the Mečiar establishment in the East.
These problems have also been highlighted by the demarches of the European Union states, the Union itself and the USA. Because of developments in Slovakia, NATO has even declared that it does not count on the country’s accession. However, public pressure grew despite the result of the 1997 referendum, which Mečiar tried to overturn. Public opinion thus turned the helm of foreign policy towards the West.
Mečiar’s period, however, brought persistent resistance to pro-Western tendencies and between 1994-1997 did not allow new ties with the Western world. In the spirit of Mečiar’s statements “If the West does not want us, we will turn to the East”, Slovakia’s relations with Russia were strengthened. A new Russian-Slovak bank was to form the basis for Mečiar’s people’s ties to Moscow.
Russian Prime Minister Viktor Chernomyrdin has also long obliged the Slovaks with promises that a new route of the Yamal gas pipeline will run through Slovakia. Mečiar also solemnly announced the promise of free trade with big brother Russia. An important joint cooperation venture was the Slovrusgaz joint stock company, which secured the gas trade. The Russian side was to buy Slovak goods with the money earned from the gas, thus boosting Slovak exports. However, the financing of Mečiar’s entourage was also lost in the opaque bilateral agreement, which was a covert interference in the democratic development of the newly formed state. Moreover, ideas of mutual free trade made the international economic community, of which Slovakia was gradually becoming a part, nervous.
Against the background of trade cooperation, military cooperation also developed, to which the Slovaks had committed themselves in 1993. The Slovak armed forces trained on Russian territory and acquired fighter jets, air defence systems and spare parts from Russian army warehouses. Only years later did it become clear that this was a fraud on the Slovak budget. In fact, the Russians used the military goods to wipe out a large part of the debt they owed to Slovakia. However, they had grossly inflated the value of the equipment supplied. Mečiar and his entourage were never held responsible for these decisions. The cooperation resulted in other non-transparently formed companies that cooperated on joint projects, for example in the production of engines for military aircraft.
Much of the debasement of Russian debt was carried out by the activities of Devin Bank. Its majority share was owned by a Russian shareholder. The bank’s management was controlled by the Mečiar government through personnel appointments. The successful lobbying for the Russian completion of the Mochovce nuclear power plant units was also an important trump card in the Russian effort to dominate Slovakia with economic contracts. This made Slovakia dependent on buying nuclear fuel from the Russian Federation for decades to come. Moreover, the completion project has become significantly more expensive over the years and is still one of the most non-transparent examples of economic projects in the country. By 1996, Mečiar had signed 120 official trade agreements with Russia.
