Czech government set to start new year with minority

By bne IntelliNews December 21, 2012

bne -

Following a rare month of peace and quiet, the Czech government was hit with yet another crisis on December 20, as junior coalition member Lidem called on its ministers to resign by January 10. The move leaves Prime Minister Petr Necas with a minority in parliament and heavily exposed to collapse.

The call from Lidem leader Karolina Peake for her party members to walk out came after Necas fired her as defence minister - a post she held for no more than a few days. "I suppose that this is a move to the opposition," Peake said, according to CTK. She added that the party leadership had spoken about the step with its ministers and deputies, and claimed "they are not opposed to it."

Necas admitted that the government is now in a minority, but in his latest desperate bid to avoid early elections - which would see the parties making up the austerity-toting right devastated at the polls - insisted that any decisions on its future will be made by specific votes in the parliament. Unsurprisingly, Necas also said that he's happy to continue cooperating with Lidem. However, Peake cannot insist on heading the defence ministry, he added.

Peake said "we consider the affair a loss of mutual trust," adding that she cannot imagine what could reverse the decision of the Lidem leadership.

While appearing to have popped out of the blue, the crisis has its roots firmly in two previous flirtations with government collapse this year. Lidem was born in May, rising from the implosion of former coalition partner VVV.

Meanwhile, it was outgoing President Vaclav Klaus that started the wheels in motion to force Peake from her ministerial post, objecting earlier this week to her move to replace senior advisors at the defence ministry. The founder of Necas' ODS party cast doubt upon her appointment even before that shake up, saying that he was dubious that soldiers would "take orders from a girl".

It's widely understood that Klaus was behind an ODS rebellion that threatened to collapse the government through the autumn, and was only put down by Necas in early November.

Lidem's apparent move out of government is likely to leave huge question marks hanging over the country for yet another extended stretch, as Necas and his partner Top 09 scramble to avert yet another crisis - although the PM appears to be running out of options as he tries to stave off what looks increasingly inevitable. That leaves investors watching for signs that this time early elections must come, which would almost certainly bring with them a left-leaning government to adapt the current strict fiscal consolidation drive.

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