The Czech Republic (officially Czech: Česká republika, short form in Czech: Česko, is a landlocked country in Central Europe and a member state of the European Union. The country has borders with Poland to the north, Germany to the northwest and west, Austria to the south, and Slovakia to the east. The capital and largest city is Prague (Czech: Praha), a major tourist destination. The country is composed of two entire historic regions, Bohemia and Moravia, and parts of Silesia.

The Czech lands were under Habsburg rule from 1526, later becoming part of the Austrian Empire and Austria-Hungary. The independent republic of Czechoslovakia was created in 1918, following the collapse of the Austro-Hungarian empire after World War I. After the German occupation of Czechoslovakia, disillusion with the Western response and occupation by the Red Army, the Communist party got a majority in 1946 elections. Czechoslovakia was a Communist state from 1948 until the 1989 Velvet Revolution. On 1 January 1993, the country peacefully split into the Czech and Slovak republics.

The Czech Republic is a pluralist multi-party parliamentary representative democracy. President Václav Klaus is the current head of state. The Prime Minister is the head of government (currently Mirek Topolánek). The Parliament has two chambers — the Chamber of Deputies and the Senate. The Czech Republic joined NATO in 1999 and the European Union in 2004. It is also a member of the OECD, the Visegrad group and the Council of Europe.

Geography

The Czech landscape is quite varied; Bohemia to the west consists of a basin, drained by the Labe (German: Elbe) and Vltava rivers, surrounded by mostly low mountains such as the Sudetes with its part Krkonoše, where one also finds the highest point in the country, the Sněžka at 1,602 metres (5,256 ft). Moravia, the eastern part, is also quite hilly and is drained predominantly by the Morava river, but also contains the source of the Odra (German: Oder) river. Water from the landlocked Czech Republic flows to three different seas: the North Sea, Baltic Sea and Black Sea. The Czech Republic also possesses a 30,000 m² exclave in the middle of the Hamburg docks which was awarded to Czechoslovakia by Article 363 of the Treaty of Versailles to allow the landlocked country a place where goods transported downriver could be transferred to seagoing ships; this territory reverts to Germany in 2018.

Population

The vast majority of the inhabitants of the Czech Republic are Czechs (94.2%, out of which 3.7% claimed Moravian ethnicity and 0.1% Silesian in the 2001 census). The largest minorities are Slovaks (1.9%), Poles (0.5%), Germans (0.4%), and Roma people.

Political system

The Czech Republic is a pluralist multi-party parliamentary representative democracy, where the Prime Minister is the head of government. The Parliament is bicameral, with the Chamber of Deputies (Czech: Poslanecká sněmovna) and the Senate.

Military

The Czech Armed Forces consist of Land and Air Forces and of specialized support units. In 2004, the Czech military completely phased out conscription and transformed into a fully professional military force. The country has been a member of NATO since March 12, 1999. Military spending is around 1.8% of GDP (2006).

Economy

50 CZK banknoteOne of the most stable and prosperous of the post-Communist states, the Czech Republic has been recovering from recession since mid-1999. Growth in 2000-2001 was led by exports to the European Union, especially Germany, and foreign investment, while domestic demand is reviving. The rate of corruption remains one of the highest among OECD countries.

Fiscal deficit is becoming a problem, with the 2007 deficit estimate having been recently raised to 4.0% of GDP from 3.3% previously. The government is currently looking over several reform plans to cut the deficit to 3.0% (required for Euro adoption by the Stability and Growth Pact).

Moves to complete banking, telecommunications, and energy privatisation will add to foreign investment, while intensified restructuring among large enterprises and banks and improvements in the financial sector should strengthen output growth. The government has recently agreed to the sale of a 7.0% stake of ČEZ, the energy producer.
The country is scheduled to fully implement the Schengen Agreement and therefore abolish the border controls with all of its neighbours (Germany, Austria, Poland, Slovakia) as of 31 December 2007.

Last Czech government has expressed a desire to adopt the euro currency in 2010, but current government postpone it due to budget deficits. Exact date was not set up, but finance ministry described 2012 as realistic date, if public finance reform will pass.

Tourism

The Czech economy gets a substantial income from tourism: in 2001, the total earnings from tourism reached 118.13 billion CZK, making up 5.5% of GNP and 9.3% of overall export earnings. The industry employs more than 110,000 people - over 1% of the population.

There are several centres of tourist activity: The historic city of Prague is the primary tourist attraction, and the city is also the most common point of entry for tourists visiting other parts of the country. Most other cities in the country attract significant numbers of tourists, but the spa towns such as Karlovy Vary and Mariánské Lázně are particularly popular holiday destinations. Other popular tourist sites are the many castles and chateaux, such as those at Karlštejn, Konopiště and Český Krumlov. Away from the towns, areas as Český Ráj, Šumava and the Krkonoše mountains attract visitors seeking outdoor pursuits.

The country is also famous for its love of puppetry and marionettes. The Pilsner style beer originated in Western Bohemian city of Plzeň.

International rankings

Human Development Index 2006: Rank 30th out of 177 countries
Index of Economic Freedom 2006: Rank 21st out of 57 countries
Reporters Without Borders world-wide press freedom index 2006: Rank 5th out of 168 countries
Global Competitiveness Report 2006: Rank 29th out of 125 countries
It was also ranked as the highest alcohol-consuming nation by The Economist in 2006.