Leading Article: After the velvet divorce

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AT midnight, Czechoslovakia, a not-so-far- away country created in 1918 out of the ruins of the Austro-Hungarian empire, will cease to exist. In its place will arise two separate states: the Czech republic, with 10 million people but still lacking a name, and Slovakia, population 5 million. Although an old Slovak dream of independence will thus be fulfilled, celebration by its people this evening is likely to be muted. Among the 600,000-strong Hungarian minority there will be only apprehension.

With hindsight, many Slovaks realise they really wanted not full independence but more autonomy. Their mistake in the June elections was to elect a nationalist former Communist, Vladimir Meciar, who sought Slovakia's recognition as a separate state and representation at the United Nations. His economic policies were also incompatible with those of the man who simultaneously became the Czech Prime Minister, Vaclav Klaus. While Mr Meciar favoured a slow path towards the privatisation of business and industry, the pugnacious Mr Klaus was bent on a rapid transformation of the much more sophisticated Czech economy. The Czech proved the shrewder negotiator: Mr Meciar found himself given a choice of full independence or compliance with Prague. Boxed in by his own rhetoric, he had no choice but to go for a complete break.

The Slovaks start heavily handicapped. Whereas between the wars industry in Bohemia and Moravia was on a par with Germany's, Slovakia remained backward, agricultural and fervently Catholic. Hitler played on old antagonisms by making the Czech lands a harshly governed protectorate, while installing a fascistic Catholic puppet government in Slovakia. Under the Communists, Slovakia suffered a crash course in industrialisation, heavy armaments a speciality; in the post- Communist era, President Vaclav Havel's scruples about arms exports were an added source of Slovak resentment. The newly independent state will probably soon be supplying arms to the world's less savoury regimes.

It is to the credit of both sides that they have succeeded in negotiating (compare Yugoslavia) a divorce as unviolent as the Prague revolution that overthrew Communism in 1989. But there is no shortage of potential disputes. Currency union is doomed, with the Czechs determined to balance their budget and the Slovaks expected to head down the road of deficit financing and inflation.

The widespread fear is that when Mr Meciar looks around for someone to blame for his government's economic failures, he will pick on the Hungarian minority as scapegoats. Ethnic Hungarians in Slovakia's eastern region already feel discriminated against, as do those in Romania and Serbia. Any tendency to victimise them further will inflame nationalist sentiment in Hungary itself. Relations have recently been strained by Slovakia's determination to complete the Gabcikovo dam scheme, now seen as a threat to the ecology of the Danube basin. The entire project is to be reassessed, with European Community assistance. In this, as in any subsequent disputes, Mr Meciar's capacity to inflame tensions in the region must not be underestimated. Equally, the EC must leave no doubt that his government's ambitions for membership will be delayed by any backsliding from democratic government and economic reform.