The Czech Republic is a parliamentary democracy with a 200-member House and an 81-member Senate. Parliament has full legislative powers. The president, who is the head of state, is elected by a joint session of the legislature for a five-year term. The president appoints the Prime Minister, usually the leader of the largest political group in the legislature. Together with the President, the Prime Minister appoints a Council of Ministers, which must have the approval of parliament.
Following the 1993 separation of the Czech and Slovak Republics, the Czech Republic raced toward capitalism, privatizing approximately 1,000 businesses per month. However, there remained too much government influence on the private economy. The country still had a low wage, low-tech economy often dependent on out-of-date equipment and an inefficient industrial base.
A financial crises ensued in 1997. Due to a series of reforms initiated by a government restructuring agency formed in 1999, the Czech Republic weathered the crisis and currently enjoys a strong, stable economy. Privatization of banks and utilities, further restructuring of industries, and encouragement of foreign investment all served to promote positive economic changes, while readying the country for European Union (EU) membership.
The Czech Republic is clearly oriented toward the West. Germany is one of its major trading partners and investors, but demand for its products is increasing from other EU fronts as well. The country has a highly qualified workforce. It became a member of the North Atlantic Treaty Organization (NATO) in March 1999, and in May of 2004 achieved its goal of joining the EU.