Red Wolves & White Knights

by Peter Kysel

  The fall of communism in Europe is going to disrupt our lives.

  #

  Dissident President

  A few days later, we were lounging around the swimming pool, when Rick, who was nodding on a sofa in front of his new television set, shouted: “Peter, come over here. You must watch this.” The election of the former dissident Václav Havel as president was being transmitted live from Vladislavský Hall in Prague castle. It was a bizarre specta­cle. Havel was being elected by the communist deputies of the outgoing regime and sworn in by the same lawyers who for decades had persecuted and jailed him.

  “Timing is everything,” I agreed and marvelled at life’s paradoxes. Rick looked at me.

  “You have the perfect skills for your emerging country. You should go and visit the new Prague and have fun redis­covering your homeland. There should be great opportuni­ties for you. I really envy you.”

  On the flight home, I reflected on my potential involvement in a new liberated Czechoslovakia. I speak Czech, English and Russian and have a working knowledge of other lan­guages. I have not been soiled by collaboration. I have expertise in investment banking and privatisation, which will be two essential skills needed in my homeland.

  I asked myself how my Czech compatriots would see me. They will know that they need these skills. The country is poor, so many will resent me as a rich outsider. Some will see me as an emigré traitor.

  While the possibilities of a political, or financial career beckoned me to Prague, I was returning to London to be shoehorned into an exciting promotion at Lloyds Merchant Bank. Which is it going to be? After two decades in political exile and having made a career in London, I seemed to be spoiled for choice.

  Looking at the cloudy sky above London, I had doubts. The regime has crumbled, but communist networks remain in place. They will fight people like me. I didn’t expect that job promotion in London. It all came too easily. Will it really happen? As the airplane circled Heathrow airport, anxiety crept in. My inherent investment intuitions were warning me My prospects look too good. Something will blow up.

  On my return, I immersed myself in central and eastern European affairs, to try to discover the little-known reali­ties of these countries and to find answers to the two ques­tions. What business opportunities are there and should I get involved?

  PART 2

  The First Half of the Nineties – Opening up Europe

  In the sixties my generation challenged the ruling elites and forced cultural changes in society. In the nineties my generation seized power and overturned the post-war order. We delivered a peace dividend, which had multiplied the world’s prosperity and transformed security in Europe. The Dow Jones industrial average stock market index tracked rising affluence. As a window on the real world, it climbed dramatically, from 2,500 to 11,700, multiplying nearly five times. The age of globalisation had begun.

  Margaret Thatcher resigned as prime minister in November 1990, having transformed her country over the previous decade. After 8000 years of separation, the Chunnel workers reconnected England to mainland Europe. The European Union was born in February of 1992 on the signing of the Maastricht Treaty. Shortly afterward the UK and Italy were forced out of the European exchange rate mechanism. My acquaintance from Oxford, Bill Clinton, was elected presi­dent of the USA in 1992.

  New technologies were developed. Tim Berners-Lee began working on the world wide web in 1990. The first web browsers came online, and emails were launched in 1993. In quick response, personal computer ownership in the US reached a third of the population and started the digital revolution.

  Changes in Europe were dramatic and largely peaceful. Only the breakup of Yugoslavia developed into ethnic wars. Hugely popular mass privatisation programmes were intro­duced in Central Europe in the first half of the decade. State owned economies were transformed, to the benefit of all. Russia followed in 1995 with a flawed privatisation system, creating the new elite class of oligarchs.

  The euro was introduced on 1st January1999 to jubilation on the Continent and derision in the UK. Curiously, sterling lost a quarter of its value against a currency that was pre­dicted to fail. President Boris Yeltsin stepped down on 31st December 1999, in favour of Vladimir Putin.

  Chapter 3

  Know the Place for the First Time

  We shall not cease from exploration.

  And the end of all our exploring will be to arrive where we started

  And know the place for the first time.

  T. S. Eliot, ‘Little Gidding’

  After twenty years in exile, I was torn. I longed to restore the bonds with my family, but I felt apprehensive about returning. Throughout my life the country’s regime has been brutal. My trust in its legal system was destroyed when it handed me a jail sentence. The secret police were its vicious sword. I was only prepared to return once the StB was dissolved.

  Still cautious, I arranged to visit my homeland, in February 1990, on a business trip. I travelled on a British passport, reckoning that the combined protective umbrellas of a large bank and the UK embassy, would protect me from harass­ment. As a further precaution, I arranged a series of offi­cial meetings, thus making me visible throughout the visit. These preparations paid off. As a British investment banker and a Czech speaker, I was offered privileged access to who­ever I wished to meet.

  Looking down over the countryside on our approach to Ruzyně airport in Prague, I thought Am I being paranoid by taking all these the precautions on my return home?

  My intuition not to return under the previous regime turned out to be justified. I discovered a few years later that my name had been on the StB list of monitored people, con­taining instructions to “Detain on arrival for interrogation by the central StB”. People met with unfortunate accidents at the notorious StB headquarters in Bartolomějská Street. My father was beaten up during his interrogations there.

  When I stepped into the street outside the arrival hall, with­out being arrested, I felt a huge sense of relief. The Velvet Revolution had happened three months earlier. This was a good time to find out how it had happened and what the chances were for real change. But first I wanted to visit my family.

  #

  Aunt and Uncle

  On Saturday 11th February 1990, I rang the bell of my aunt’s flat on the fifth floor of a block of flats at Klimentská Street, in the centre of Prague. I remembered that door well. For twenty years I dreamt about ringing that bell. I rang it thousands of times in my youth. The cream painted wooden door looked the same.

  This was the most important moment of my homecoming. I longed to re-join my family, but I was apprehensive. How would it go? How would they react? Would we fall out, or find that we had drifted apart? If this visit doesn’t bring us back together, it’ ll be end of my homecoming. If I fail to connect with them, it’ ll be pointless to stay in Prague. I didn’t dare think any further.

  My cousin Irena opened the door, just like I had always imagined she would, and we embraced. The last time I saw her, she was a teenager. Now she was a married mother, with two children. The entrance hall of the flat, with the light brown lino, looked exactly as I remembered it. I forgot the Czech custom of taking one’s shoes off and walked straight into the sitting room. My aunt Irenka and my uncle Karol rose to meet me.

  “Welcome home,” said my aunt and we embraced and kissed. I am sure I cried; I don’t remember. Then we talked. I don’t recollect what was said, but I basked in the warmth of their welcome. I was overwhelmed by emotion after all the years of separation. As we ate and drank, my tension gradually eased. Our bonds had remained strong and I wasn’t a stranger. There were no arguments. They still loved me, and I loved them. I was welcomed back home.

  “You have always been here, with us. You never left. Every year, we kept a chair for you at the Christmas table,” said my aunt Irenka softly and my fears dissolved.

  My cousin’s husband, Zdeněk, was a professor at the Agriculture university. He was more outspoken in his r
esentment of the old regime.

  “They hounded you and your parents for decades. Now, you deserve justice.”

  “What can I do?”

  “The Technical university refused to grant you your degree in 1968, because you were abroad. They should make amends now. Our university does it automatically for people returning from exile.” I nodded and my aunt added “You should ask for the restitution of your family house. When your mum and your stepfather died, the villa was confiscated, because you were in exile. Now they should return what they stole from your family.” I nodded again, not quite taking in all their advice. It was an emotional time, but I was happy to find the family so supportive. I didn’t want to spoil this moment by dealing with practical issues. These things won’t disappear. I’ ll deal with them one day. I left the family and walked slowly through the centre to the Palace Hotel near Wenceslas Square, savouring the experience of being back.

  #

  First Impressions

  Rediscovering the streets and observing the people, my immediate response was immense sadness. The country was far more run down than I remembered it. I felt compassion for my contemporaries, who had spent the most productive period of their lives locked up in this country. I began to hear stories of moral strength, corruption and resentment in this divided nation and enjoyed the cynical Czech sense of humour.

  Fears about my personal safety were unfounded. Prague, compared to London, was a small provincial town. There were hardly any foreigners around. I was conspicuous in my western clothes, but nobody bothered me. People were gen­erally dressed in cheap grey clothes and carried string bags. The shops were poorly stocked. The city was neglected. Piles of rubble littered the dirty streets. Buildings were grubby, plaster peeling off with many covered in wooden scaffolding.

  “They are going to repair them”

  “No,” commented the man at the Ministry for Local Industry during our meeting.

  “Scaffolding is erected to protect pedestrians from falling masonry and roof tiles. There is no money for repairs.”

  Outside the historical centre, roads were potholed and lined with discarded rubbish. Toilets in public buildings were filthy. Food, and especially meat, outside the top hotels, was bad. The few cars in the streets were mostly locally made Škodas, Soviet Volgas, which also served as taxis, and the lethal east German Trabants, made of fibreglass and glued together. Diesel lorries, emitting clouds of black smoke, were painted a dull blue. There were more of them than passenger cars.

  Shopping was a confusing process. Having paid for my pur­chases, I assumed that the goods would be wrapped up and put in a carrier bag for me, but I was expected to do my own wrapping and provide my own carrier bag. This explained why everybody carried string bags. Only beer was of a high quality.

  I was bemused by these early experiences. Generally, I felt awkward and found myself apologising for inconveniencing others. Sometimes, other shoppers, noticing my politeness, a slight English accent and foreign clothes, came forward and helped. Taxis, like everything else, cost a fraction of London prices. On the whole, being better dressed had its advantages. People were more respectful to me than to each other.

  I invited my father Vojta to a celebration dinner at the Alcron hotel. Vojta used to take me out for smart dinners when I was a student. It was my turn to reciprocate. The evening didn’t start well. Vojta looked at the menu folded it and said, “I cannot dine here. Let’s go somewhere else” He took me to the Lucerna restaurant nearby and explained, “I couldn’t order a meal which cost more than my monthly pension.” After that clarification, our evening went well.

  I explained my work and Vojta listened without interruptions and became serious. He leaned forward, “Communists stole everything from our family. They confiscated my design salon, our family farms, and your stepfather’s business. He was sentenced to forced labour for life. They were going to hang your grandmother for slaughtering her own pig. They persecuted you as a child and we couldn’t help you.”

  “It’s all in the past. Don’t worry about it,” I said, but Vojta was determined to continue.

  “You mustn’t forget history. You have unique skills to reverse the harm caused. I’m a powerless pensioner, but you have experience which gives me hope for the future. Find a way of reversing the communist injustices before I die.” Vojta was normally a light hearted, easy going man. This was an unexpectedly passionate speech. He realised it and changed the subject to calm down. I responded before we left.

  “The communists left people worse off” and Vojta responded in a flash, “The best revenge is to make people better off. That’s you job.”

  “Thanks dad” I said sarcastically, “and am I supposed to know how to accomplish that?”

  “You’ll think of a way.”

  During our chat, I remembered Jack Straw’s comments. I had to ask how my father’s generation felt at the end of the war.

  “What did you and other people think about the Yalta agreement?” Vojta bristled

  “Like the Poles and half of Europe, we were betrayed by Churchill and Roosevelt. They handed Stalin an empire and we became Soviet serfs.”

  “Why didn’t you tell me about it before I left in 1968?”

  “I wanted to protect you.” We sat quietly for a while and before he left, Vojta said

  “Let’s talk more. I have bought two tickets for Má Vlast (My Homeland) for the opening concert at the Prague Spring Festival in May. Do you want to go?” Smetana’s symphonic poem is a patriotic musical composition celebrating the coun­try and its history. It has an immense symbolic importance to Czechs. I was moved by my father’s gesture and gladly accepted.

  #

  Students’ Reunion

  On Sunday, 12th February my former co-student, Jarda arranged a reunion party in his flat in Krakovská Street. The apartment block was built some hundred years earlier, without a lift. The dark grey dirty plaster was peeling off the building and there was wooden scaffolding outside. The building, like other apartment blocks around the country, had been confiscated from its original owners in the 1950s. Maintenance seemed non-existent.

  By contrast, the two-bedroom flat was spotless, with most of its furniture inherited. Visitors took off their shoes in the entrance hall. Most carried their own slippers. I put my shoes down in the entrance hall and pushed them into a dark corner, feeling embarrassed by their contrast to the rest. I entered the sitting room and Jarda shouted over the general noise of the party

  “Welcome back after a very long absence. Let’s make sure that our next reunion will be much sooner.” Two dozen former students from our university raised their glasses and demanded that I made a speech. I responded by “Na vaše zdravi” (to your health) and stressed that good friends cannot be kept apart. I was surprised and moved that so many of them had turned up. I found immediate rapport with some, while others seemed like strangers. The thought occurred to me during the party I remember the people I got on well with, before I left the country. I spurned the rest. Politics divided us even as students. Later that night they asked me for my initial impressions. I couldn’t disguise my initial shock

  “Prague is in crisis. Dirt and drabness override its beauty. The countryside is derelict. The country is more run down than it was twenty years ago.” It was their turn to look shocked, so I tried to soften my comments by adding

  “Surely, the men in power are ashamed of ruining the country.”

  “They will never admit it.” I was puzzled and they added,

  “Communists twist the truth. Their facts are fakes. Always mistrust what they say.” I nodded, thinking I am back in the land of mistrust.

  #

  The State Bank

  The following morning, I met journalists. After one inter­view, the business magazine, Ekonom, asked me to write a series of articles about the market economy and financial markets.

  “People don’t know how the market economy works,” explained the journalist and quickly added, “Not that I know my
self. And as far as the financial markets are con­cerned, we don’t even know what they are…” his voice just trailed off. He did not need to continue. I responded enthusiastically.

  “I would love to send you an article. If you find that it’s pitched at the right level, I can write a whole series for your readers.” He looked alarmed.

  “We can’t pay you much. Maybe, three hundred crowns (£10) per article.”

  “That’s fine, I won’t be writing for money. I’ll just be happy to pass on my experience.” We shook hands and I left for a meeting at the British embassy. After a formal meet­ing with the ambassador, Laurence O’Keeffe in the drawing room overlooking the roofs of Prague, I was briefed by the councillor, Stuart Laing

  “The people, who will have economic influence, are based in the Prognostics Institute. Václav Havel and his fellow dissidents focus on politics. They don’t realise that democ­racy depends on a functioning market economy.” This was the most incisive advice I received during the entire visit.

  I left the embassy for a meeting at the Czechoslovak state bank (CSSB – the central bank). The CSSB was located opposite the Municipal House, in the commercial centre of Prague. At the end of our meeting, the governor, Tošovký, asked me to give his senior employees an impromptu lecture.

  “None of us have any direct experience of Western econ­omies or financial markets. This’ll be the first time we’ve ever heard the explanation in our language from an experi­enced English banker,” he said, inventing my informal title in the region. I agreed to stay. While a few dozens of senior employees were quickly assembled, I jotted down some notes for the presentation. I felt energised at the prospect of being the prophet of the market economy. To give me extra credibility the governor introduced me as “náš anglický bankéř” (our English banker).