Mon Mar 9, 2009 6:10pm EDT
By Claudia Parsons
NEW YORK, March 9 (Reuters) - 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...
Klaus 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.
