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formingabroad“Coalition ofNational Sacrifice”, including everyone fromChristian Demo-
crats to former Communists.
The main concern of the new government was how to transform an outdated command-sys-
tem economy into a marketeconomy . The argument over the speed and model of economic
reform eventually caused Civic Forum to split into two main camps: the centre-left Občán-
ské hnutí, or Civic Movement (OH), led by the foreign minister and former dissident Jiří Di-
enstbier, who favoured a more gradualist approach; and Občánská democratická strana, the
right-wing Civic Democratic Party (ODS), headed by the finance minister Václav Klaus ,
who pronounced that the country should “walk the tightrope to Thatcherism”.
One of the first acts of the new government was to pass a restitution law , handing back
small businesses and property to those from whom it had been expropriated after the 1948
Communist coup. This proved to be a controversial issue, since it excluded Jewish families
driven out in 1938 by the Nazis, and, of course, the millions of Sudeten Germans who were
forced to flee the country after the war. A law was later passed to cover the Jewish expropri-
ations, but the Sudeten Germans never received a single crown in compensation.
The Slovak crisis
Oneofthemostintractableissuesfacingpost-CommunistCzechoslovakiaintheyearsimme-
diatelyfollowingtheVelvetRevolutionturnedouttobethe“ Slovakproblem ”.Havingbeen
the victim of Prague-inspired centralization from Masaryk to Gottwald, the Slovaks were
in no mood to suffer second-class citizenship any longer. In the aftermath of 1989, feelings
were running high in Slovakia, and more than once the spectre of Slovak independence was
threatened by Slovak politicians, who hoped to boost their popularity by appealing to voters'
nationalism. Despite the tireless campaigning and negotiating by both sides, a compromise
failed to emerge.
The June 1992 elections soon became an unofficial referendum on the future of the feder-
ation. Events moved rapidly towards the break-up of the republic after the resounding vic-
tory of the Movement for a Democratic Slovakia (HZDS), under the wily, populist politi-
cian Vladimír Mečiar, who, in retrospect, was quite clearly seeking Slovak independence,
though he never explicitly said so during the campaign. In the Czech Lands, the right-wing
ODS emerged as the largest single party, under Václav Klaus, who - ever the economist -
was clearly not going to shed tears over losing the economically backward Slovak half of the
country.
Talks between the two sides got nowhere, despite opinion polls in both countries consist-
ently showing majority support for the federation. The HZDS then blocked the re-election
of Havel, who had committed himself entirely to the pro-federation cause. Havel promptly
resigned, leaving the country president-less and Klaus and Mečiar to talk over the terms of
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