Post card from Prague

April 22, 2009

This is one in a series of post cards from Reuters correspondents across Europe, Middle East and Africa, recounting how the financial crisis is playing out in the capitals where they are based.

The Czechs appear to be riding out this crisis but it’s a matter of where you live.

In Prague, it’s as if all the bad news – the government ousted halfway through its stint as European Union president, industry falling off a cliff – was happening somewhere else. But the Czechs haven’t had a strong government since 1996, and the 2 percent economic contraction this year is nothing when compared to Latvia or even Germany.

I overhear a lot people discussing banks shedding workers, would-be home buyers being turned down for mortgages, and hotels cutting rates. But I don’t know anyone who has lost a job and there are still throngs of Italians and Germans flowing through Prague’s tourist sites. Also, it’s true that real estate prices are falling, but that’s largely in the dilapidated communist blocks and the eerily similar new builds thrown up by Anglo-funded developers now facing bankruptcy.

In smaller industrial towns it’s very different. Although Angela Merkel’s scrap subsidy looks to have saved the car plants for now, many producers are suffering. Shops and restaurants are empty. It almost feels like it did 10 years ago when the country was just getting used to the idea of capitalism.
One thing to remember, though, is that most Czechs are used to hardship. They save. They don’t shop much. And on weekends, many people head for the countryside, where some 50 percent have a second home in their family. Once there, people keep gardens and orchards and raise bees to produce honey. No kidding. They hike in the hills, and at night they go to the pub where a beer still costs a dollar. It’s largely a return to the 1990s, and most people are depending on the more modest way of living they’ve known for most of their lives.

(People enjoy a sunny day in a park in Prague April 15, 2009. The sunny weather is expected to last until Friday when rain is forecast. REUTERS/David W Cerny (CZECH REPUBLIC WEATHER SOCIETY ENVIRONMENT))

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