Investment Property in Czech Republic

Politics

Political stability

As a communist country, what is now referred to as the Czech Republic was not on the tourist map for most people due to a perception of political instability. However, now it is a member of the EU and has become a parliamentary democracy, it is considered one of the most stable and prosperous of the post-communist states.

Communist past

After the Soviet invasion of 1968 and the subsequent communist rule, the country that was formerly known as Czechoslovakia was closed off to the world. However, since the ‘Velvet Revolution’ and the fall of Communism in Central Europe, the Czech Republic has been opened up to the rest of the world, helped by its geographical location at the centre of Europe; conveniently near Berlin, Budapest and Vienna.

A new Czech Republic

The Czech Republic was created on January 1, 1993, when the Czechoslovak Federal Republic split into two independent states, the Czech Republic and Slovakia. Three years on from the Velvet Revolution, the Czech Republic found themselves doing well in their new-found independence, mostly due to their economy being more geared towards privatisation than Slovakia. Indeed, Slovakia found herself ill prepared for a new global market economy which resulted in economic hardship for the country.

The ‘Velvet Divorce’

These economic differences led to politicians in both republics pushing for the two to become two separate sovereign states. It was agreed to amicably disband Czechoslovakia – referred to as the ‘Velvet Divorce’ due to the amicable nature of the split. The Czech Republic was born, and was already exhibiting signs of independent political and economic success.

Political parties

Political parties that are currently represented in parliament in the Czech Republic include the Civic Democratic Party, a liberally conservative party which is clearly situated on the right; the Czech Social Democratic Party, a party that represents the program of a socially oriented state with a market economy; the Christian and Democratic Union, Czechoslovak People’s Party, KDU-CSL, a Christian democratic party with a long tradition in Czech political life; and the Communist Party of Bohemia and Moravia, the largest of the parties that are the direct followers of the Communist Party of Czechoslovakia. Its program follows some of the political and economic principles from non-democratic times.

European Union

Since May 2004, the Czech Republic has been a member of the European Union. However, the country has not adopted the euro yet and still uses its national currency, the Czech crown. Its EU membership has made it a newly popular destination for tourists, as well as creating a sense of stability now it is part of the European political arena. This stability has meant that real estate investors are also now considering adding investment property in the Czech Republic to their portfolio.