Prague - In a letter published on Tuesday by the daily Mladá fronta Dnes, Czech President Václav Klaus says that the global financial crisis did not result from insufficient market regulation, but, on the contrary, from excessive government interventions and increasing public spending.

According to Klaus, there is a risk that the rescue packages proposed by some governments will turn the European banking system into a partially state-owned and centrally regulated sector.

"What is now happening in the financial markets after long years of exceptionally solid economic growth around the world is nothing unusual. After years of growth there must necessarily be a decrease at some point," the president wrote.

He rejected that the pending recession can be "prevented by some sort of a global economy management", likening such ideas to the communist-era central planning.

Klaus argues that previous interventions by the American and European regulators encouraged financial institutions to invest in high-risk activities on unregulated markets and to cover those risks through very complicated financial products and techniques.

The president opines that "the European politicians have used the current financial shocks to abandon the Maastricht criteria (which I am not defending at all as I find them too soft)", adding that this has removed existing restrictions on "irresponsible increases in public spending and a resulting growth of governmental debt".

Klaus concludes that the EU plans to better regulate the financial markets and reform the International Monetary Fund will not lead to a "new capitalism", as termed by French President Nicolas Sarkozy, but will represent a return to an "old socialism".