Massive government spending and tighter regulation would prolong recession, Czech President Vaclav Klaus said on Monday, as he urged U.S. President Barack Obama not to endanger the free market economy in his response to the financial crisis.
In a speech at Columbia University in New York, Klaus, a former Czech prime minister who championed the free market after the fall of Communism 20 years ago, said he never expected to see such extensive government intervention again in his lifetime as he now sees around the world.
"I am therefore convinced that fighting for freedom and free markets, something we always appreciated here in this country (the United States), remains the task of the day," Klaus said.
One of the world's most vocal climate change skeptics, Klaus said he looked forward to working with Obama, who will attend an EU-U.S. summit in the Czech Republic in April on his first trip to Europe as U.S. president. The Czech Republic holds the EU presidency for the first half of 2009.
Klaus, whose position is largely ceremonial in the Czech political system, said he hoped Obama would show "an optimum mix of continuity and discontinuity" with the policies of his predecessor, George W. Bush.
"I hope it will include not endangering the basic institutions of the market economy," Klaus said, adding that his own country was resisting a trend towards massive government spending to stimulate growth.
He said Czech banks were so far relatively unscathed by the financial crisis because they followed very cautious policies in the aftermath of the Asian financial crisis.
He cautioned against trying to solve economic problems by more government intervention.
"The best thing to do right now would be to temporarily weaken, if not repeal," business regulations on labor, the environment, social issues and health, he said.
Klaus, who has written a book expressing doubts that climate change is man-made, was in New York to attend a conference of climate-change skeptics and he reiterated his view that "global warming alarmism" is a major problem.
About 190 nations have agreed to work out a new U.N. climate treaty in December in Copenhagen to step up a fight against warming that the U.N. Climate Panel says will bring more heat waves, droughts, floods and rising seas.
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