SIGNPOST: Another feeble Czech coalition faces confidence vote

By bne IntelliNews January 11, 2007

Nicholas Watson in Prague -

Czech Prime Minister Mirek Topolanek will face a crucial vote of confidence in his newly formed government on January 19. While this feeble three-party coalition could fare better than the last one, which failed to even win that confidence vote in October, its prospects after that look dim.

President Vaclav Klaus appointed on Tuesday the centre-right Cabinet led by the Civic Democratic Party (ODS), which together with the Christian Democrats (KDU-CSL) and the Greens (SZ) holds half the seats in the 200-seat parliament.

Can Topolanek hold it together?

The first hurdle for the new government will be this obligatory parliamentary vote of confidence. However, the leaders of the three-party coalition met Wednesday with the leadership of the main opposition Social Democrats (CSSD) to try to hammer out some support for the newly appointed government, but the CSSD stated it wouldn't support the coalition in a vote of confidence because of differences over the government's programme and the composition of the cabinet.

Even so, Petr Kambersky, a political analyst, reckons there is a good chance this new coalition will squeak through the confidence vote, not least because two CSSD deputies have already announced they have quit their faction and become independent. "The real question is: how many members of parliament of Topolanek's own ODS party will vote against the coalition?"

Assuming the new coalition does get through the confidence vote, Radek Narovec, an analyst with Czech brokerage Wood & Co, says it could easily collapse within a few months. All three coalition parties pursue different goals, and Topolanek would have to sacrifice the last of ODS' election manifesto pledges, let alone try to pursue any meaningful reform of the country's costly pension and healthcare systems.

"If Topolanek decides to have this broad alliance with the left, he would have to resign his position on the flat tax, one of the last items left on his election manifesto," says Narovec.

It is health and pensions that represent the biggest threats to the long-term health of the economy, which is humming along nicely - buoyed by high exports, cheaper crude oil and low interest rates - even though there hasn't been a stable government since the June 2006 elections.

The most probable and the worst outcome, says Kambersky, is a continuation of the "existing, but weak and toothless government."

But it needn't be like this: if the two main parties could sit down and form a grand coalition (an unlikely proposition given that the two present leaders, Topolanek and former PM Jiri Paroubek, hate each other), then some constitutional reform to reduce the power of small parties could be agreed, or at least they could reach some limited consensus on introducing an opt-out system for pensions.

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