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.


Send comments to Nicholas Watson


Related Articles

UK demands for EU reform provoke fury in Visegrad

bne IntelliNews - The Visegrad states raised a chorus of objection on November 10 as the UK prime minister demanded his country's welfare system be allowed to discriminate between EU citizens. The ... more

Czech food producer Hame seen next on the menu for Chinese giant

bne IntelliNews - Following a smorgasbord of acquisitions in late summer, China Energy Company Limited (CEFC) is eyeing yet another small Czech purchase, with food ... more

INTERVIEW: Babis slams coalition partners, but Czech govt seems safe for now

Benjamin Cunningham in Prague - Even as the Czech governing coalition remains in place and broadly popular, tensions between Prime Minister Bohuslav Sobotka and Finance Minister Andrej Babis remain ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss