A fiery Czech is poised to be the face of Europe.

Bilefsky, Dan

In the 1980s, a Communist secret police agent infiltrated clandestine economics seminars hosted by Vaclav Klaus, a fiery future leader of the Czech Republic, who had come under suspicion for extolling free market virtues. Rather than reporting on Marxist heresy, the agent was most struck by Mr. Klaus's now famous arrogance.

"His behavior and attitudes reveal that he feels like a rejected genius," the agent noted in his report, which has since been made public. "He shows that whoever does not agree with his views is stupid and incompetent."

Decades later, Mr. Klaus, the 67-year-old president of the Czech Republic--an iconoclast with a perfectly clipped mustache--continues to provoke strong reactions. He has blamed what he calls the misguided fight against global warming for contributing to the international financial crisis, branded Al Gore an "apostle of arrogance" for his role in that fight, and accused the European Union of acting like a Communist state.

Now the Czech Republic is about to assume the rotating presidency of the European Union and there is palpable fear that Mr. Klaus will embarrass the world's biggest trading bloc and complicate its efforts to address the economic crisis and expand its powers. His role in the Czech Republic is largely ceremonial, but he remains a powerful force here, has devotees throughout Europe and delights in basking in the spotlight.

"Oh God, Vaclav Klaus will come next," read a recent headline in the Austrian daily Die Presse, in an article anticipating the havoc he could wreak in a union of 495 million people already divided over its future direction.

An economist by training and a free marketeer by ideology, Mr. Klaus has criticized the course set by the union's departing leader, President Nicolas Sarkozy of France. The ambitious Mr. Sarkozy has used France's European Union presidency to push an agenda that includes broader and more coordinated regulation by the largest economies to tame the worst of the market's excesses.

Even those who worry about Mr. Klaus's potential role as a spoiler concede that his influence over policy in the European Union will be circumscribed, given his largely symbolic functions as president in the Czech Republic.

But Mr. Klaus's sheer will and inflammatory talk--the eminent British historian Timothy Garton Ash once called him "one of the rudest men I have ever met"--are likely to have some impact.

"Klaus is a provocateur who will twist his arguments to get attention," said Jiri Pehe, a former adviser to Vaclav Havel, Mr. Klaus's rival and predecessor as president.

To supporters, Mr. Klaus is a brave, lone crusader, a defender of liberty, the only European leader in the mold of the formidable Margaret Thatcher. (Aides say Mr. Klaus has a photo of the former British prime minister in his office near his desk.)

To his many critics, he is a cynical populist, a hardheaded pragmatist long known as a foil to Mr. Havel, the philosopher-dreamer, and a troublemaker.

Mr. Klaus declined to be interviewed for this article. His office called a list of proposed questions "peculiar."

As a former finance minister and prime minister, he is credited with presiding over the peaceful 1993 split of Czechoslovakia into two states and helping to transform the Czech Republic into one of the former Soviet bloc's most successful economies.

But his ideas about governance are out of step with many of the European Union nations that his country will lead starting Jan. 1.

While even many of the world's most ardent free marketeers acknowledged the need for the recent coordinated bailout of European banks, Mr. Klaus lambasted it as irresponsible protectionism. He blamed too much--rather than too little--regulation for the crisis.

A fervent critic of the environmental movement, he has called global warming a dangerous "myth," arguing that the fight against climate change threatens economic growth.

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Perhaps his greatest ire has been reserved for the European Union. In 2005, he called for it to be "scrapped." Now, he is a vocal opponent of the Lisbon Treaty, which aims to help Europe become more of an international player, but which he argues will strip countries of sovereignty.

On a state visit to Ireland this month, Mr. Klaus incensed the government and annoyed many in his own country by publicly praising Declan Ganley, a businessman and political activist who was influential in persuading a majority of Irish voters in June to reject the treaty.

And while other European leaders have criticized a newly assertive Russia, Mr. Klaus has forged close ties with Prime Minister Vladimir V. Putin and recently distanced himself from the Czech government's criticism of Russia over the war with Georgia in August.

Those who know Mr. Klaus say his economic liberalism is an outgrowth of his upbringing. Born in 1941, he obtained an economics degree in 1963 and was deeply influenced by free market economists like Milton Friedman.

Mr. Klaus's son and namesake, Vaclav, recalled in an interview that when he was 13, his father told him to read Aleksandr Solzhenitsyn to better understand Communism's oppressiveness.

"If you lived under communism, then you are very sensitive to forces that try to control or limit human liberty," he said in an interview.

In 1989, during the Velvet Revolution to overthrow Czechoslovakia's Communist leaders, Mr. Klaus offered his services as an economist to Civic Forum, the group opposing the government. When the new government took control, he became finance minister. But his relationship with the dissidents quickly soured.

Mr. Havel recalled in his memoirs that Mr. Klaus had an aversion "to the rest of us, whom he had clearly consigned to the same Dumpster, with a sign on it saying 'left -wing intellectuals.'"

In 1991, Mr. Klaus founded a new center-right party, the Civic Democratic Party, which won elections in June 1992, making him prime minister. His radical privatization strategy--including a voucher scheme later emulated in Russia, where it led to the amassing of vast wealth by a few oligarchs--was marred by allegations of corruption, with Mr. Havel accusing Mr. Klaus of "gangster capitalism."

Ladislav Jakl, now Mr. Klaus's pony-tailed private secretary, said that the main difference between the leaders was that Mr. Havel sought to give people goodness whereas Mr. Klaus was determined to bestow freedom.

Mr. Klaus was forced to resign as prime minister in November 1997 after a government crisis caused by a party financing scandal. And in 2002, he was forced to resign as party leader when his party lost a second election.

But Mr. Klaus later decided to run for the presidency and won by a slim margin in 2003. He has since gained in popularity, and was re-elected this year by the Czech Parliament.

Bohumil Dolezal, a leading commentator who once advised Mr. Klaus, said Mr. Klaus's greatest talent was his ability to appeal to average Czechs, who imbibed his easy populism along with their beers.

"Czechs have a deep and hysterical past full of injustice, and Klaus is a master at tapping into this," Mr. Dolezal said, adding that the office of the presidency, despite its limited powers, lends the aura of emperor-king.

"Even if a horse was president of the Czech Republic, it would have a 50 percent approval rating," he said. "And Klaus is surely much cleverer than a horse."

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