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Czech Reformer Václav Klaus Ousted on Sunday in "Velvet Defenestration"

PRAGUE (Reuters) - Václav Klaus, post-Communist eastern Europe's most durable premier who announced early on Sunday he was resigning, had his political baptism eight years ago when he emerged from a communist economics academy to preach the new capitalism

. It was a frigid late November in 1989, during the frantic but bloodless "Velvet Revolution", when the Czechoslovak parliament stripped the Communist Party of its "leading role" as hundreds of thousands of people gathered in Prague for a 12th day of protest demonstrations. The trim and pepper-moustached academic, then 48, delivered his "What We Want" demands to the Communists on behalf of Václav Havel's Civic Forum movement. It set Prague on a transition path which would long bear his mark. It took manoeuvring inside the Civic Democratic Party (ODS) he has dominated since 1992 to pull off the political "velvet defenestration" of Klaus in a city where tossing leaders out of windows has long been a method of choice. A vague finance scandal over donations to his party and their alleged connection to privatisations was the primary excuse for ousting him, but political analysts said those who forced him out had grown tired of his often brash leadership. In an interview with Reuters last month, Klaus, now 56, said he was astonished to be among Europe's elder statesmen. Abroad, Klaus has always been the "other Václav" in the shadow of playwright president Václav Havel. The enmity was mutual, and when Klaus spun a right-wing faction from Havel's Civic Forum movement in 1991, the estrangement was complete. Klaus's complicity in the 1993 split of Czechoslovakia, the so-called "Velvet Divorce", put an even wider gulf between the inclusive Havel and the individualist Klaus. In the last eight years, Klaus has whetted appetites for free-market wealth in many, while attracting the ire of others who saw him as the embodiment of heartless capitalism. The monetarist professor of economics, who enjoys the label of "Thatcherite" while emulating the uncompromising style of former British prime minister Margaret Thatcher, said his big problem has been the high aspirations of the Czech people. Klaus learned his party faithful had turned on him while attending an international conference in Sarajevo on Friday. Ironically it was exactly seven years ago that Thatcher was doomed in a similar thrust of party intrigue while in France. After a daunting spring when slowing growth and a huge trade deficit brought on a sharp depreciation of the Czech crown, he and his party fell sharply in the polls, still insisting that tougher austerity was necessary. State sector wages are set to contract next year, rents and energy prices have been put closer to market levels, albeit not fully, and ministries have been told to cut spending. While he has recently adopted a more accommodating tone towards his critics, Klaus still fiercely defends his record. He bristled at criticism that his unwieldy trademark coupon privatisation scheme -- which transferred thousands of firms to citizens and played a role in his fall -- has hampered restructuring, fuelled trade deficits, and slowed growth. Klaus said he would probably put his theories and experiences to work in academia. Could he join a major university's economics department? "Something like that, something like that."

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