Czech parties ink coalition deal paving way to cabinet

Three Czech parties on Monday signed a coalition deal that should pave the way for a new cabinet months after a bribery and spy scandal toppled the prime minister.

AFP| Updated: Jan 06, 2014, 21:48 PM IST

Prague: Three Czech parties on Monday signed a coalition deal that should pave the way for a new cabinet months after a bribery and spy scandal toppled the prime minister.

Bohuslav Sobotka, the most likely next prime minister, announced the completion of a coalition deal 72 days after a snap election sparked by the scandal.

The deal includes "both the part containing the programme and the supplement distributing government jobs," Sobotka told reporters, pledging "a change for the better, support for economic growth and employment."

Sobotka`s left-wing Social Democrats (CSSD) won the election but were forced to join forces with the populist ANO party, which sprang out of nowhere to finish a close second in the snap vote.

The smaller centrist Christian Democrats complete the coalition, which will command a stable majority of 111 votes in the Czech Republic`s 200-seat parliament.

October`s election followed months of political turmoil after the previous centre-right administration fell last June.

The prime minister at the time, Petr Necas, was toppled by a bribery and spy scandal involving his then lover and now wife.

All eyes are now on President Milos Zeman, an outspoken left-winger who took office last March as the first directly elected president of the EU member of 10.5 million people.

Zeman is due to name the prime minister and then approve cabinet ministers at his proposal.

But he has repeatedly suggested he might decline to do so in some cases if he deems the candidates` skills inadequate to their new jobs.

He already stunned local politicians by naming a non-partisan cabinet of cronies shortly after the Necas government was toppled. This cabinet is still ruling the country.

Josef Mlejnek, a political analyst at Charles University in Prague, called the coalition deal "a formal step" and said he expected "some fight" over the cabinet.

"I`d expect the president to try and affect the composition of the cabinet... to push through a cabinet in which he will have an ally," he told AFP.

Sobotka, a 42-year-old lawyer turned politician perceived as short on charisma, insisted that "there`s no reason for the president to put off" his appointment.

"I hope Chairman Sobotka will persuade the president with his charm," added Andrej Babis, the billionaire head of ANO and the second wealthiest Czech, who runs a chemical and farming group.

Under the deal, Babis should become the next finance minister.

But he may face trouble over allegations he collaborated with the communist-era secret police as current laws bar collaborators from holding ministerial posts.

The coalition has pledged to keep the public finance deficit at or under 3.0 percent of gross domestic product (GDP), the threshold fixed by the European Union.

At Babis`s request, it has also vowed not to hike taxes this year but instead trim spending on public administration.

Dependent on car production and exports to the struggling eurozone, the Czech Republic exited a record 18-month recession in the second quarter of 2013.

But a full recovery is still remote as the economy -- central Europe`s third biggest after Poland and Austria -- contracted by 0.1 percent in the third quarter of last year compared to the previous three months.

The Czech central bank expects an 0.9-percent contraction for 2013 -- the same as in 2012 -- ahead of 1.5-percent growth this year.