This shift may have come regardless of
the German "betrayal". The Pentagon has long been contemplating the
futility of stationing tens of thousands of soldiers in the world's
most peaceful and pacifistic country.
The letter is a slap in the face of Germany, a member of the "Axis of
Peace", together with France and Belgium and the champion of EU
enlargement to the east. Its own economic difficulties aside, Germany
is the region's largest foreign investor and trading partner. Why the
curious rebuff by its ostensible prot‚g‚s?
The Czech Republic encapsulates many of the economic and political
trends in the erstwhile communist swathe of Europe.
The country's economic performance still appears impressive. Figures
released yesterday reveal a surge of 6.6 percent in industrial
production, to yield an annual increase of 4.8 percent. Retail sales,
though way below expectations, were still up 2.7 percent last year. The
Czech National Bank (CNB) upgraded its gross domestic product growth
forecast on Jan 30 to 2.2-3.5 percent.
But the country is in the throes of a deflationary cycle. The producer
price index was down 0.8 percent last year. Year on year, it decreased
by 0.4 percent in January. Export prices are down 6.7 percent, though
import prices fell by even more thus improving the country's terms of
trade.
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