Czech PM wards off coalition collapse - until the next time?

PRAGUE (Reuters) - Czech Prime Minister Petr Necas narrowly averted the collapse of his coalition this week but it could still be easily toppled by policy disputes, corruption scandals - or rifts in his own Civic Democrats (ODS) party.

"The biggest obstacle we can run into is not among parties but inside one of them," Finance Minister Miroslav Kalousek told Reuters.

"After all it would not be the first time the ODS removed its own prime minister," added Kalousek, of the conservative TOP09 party in the centre-right coalition led by Necas.

Necas's coalition won a big majority in 2010, raising hopes the country would get a strong administration after a decade of fragmented governments, but the optimism quickly faded amid factional fighting among and inside the ruling parties.

The central European country of 10.5 million fell into recession and policymaking became erratic, with taxation plans changing abruptly as the coalition squabbled. The public grew disgusted by a string of graft scandals among politicians of all shades.

This week the mild-mannered 47-year-old prime minister brought his three-party cabinet back from the brink by outmaneuvering a rebel faction to force through parliament laws on tax hikes, intended to cut the budget deficit below the EU's 3 percent limit, and also long-delayed plans for pension reform and the return of church property.

HOSTAGE

But the coalition has been weakened and now has only 99 votes in the 200-seat lower house, making it hostage to independents and internal dissent.

Karolina Peake, a deputy prime minister who leads the small coalition LIDEM party, fears new trouble may come within weeks when the upper house, dominated by the leftist opposition, sends back tax hikes approved on Wednesday for a re-vote.

"The majority is very, very fragile. We will see what happens when the tax package comes back to the house, if the 101 votes are still there," she told Reuters.

"It is all very fragmented and I fear that it will seem attractive among deputies to cause problems."

The coalition secured support from independents to win the tax vote this week, in an ad-hoc alliance that may not last.

The Czechs are no strangers to weak government. The country had cabinets with no or one-vote majorities from 1996 until 2010, hobbling policy. From that perspective, the votes on the church property and pensions are substantial successes.

Building coalitions has been difficult because 10-15 percent of parliamentary seats have been controlled by the Communists, unacceptable as partners for anyone else.

On top of that, Necas's Civic Democrats have a history of self-destructiveness. A party rebellion toppled founder Prime Minister Vaclav Klaus in 1997, and a rebellion very similar to the one Necas just put down ousted Mirek Topolanek's cabinet in 2009.

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The Civic Democrats carried the banner of post-communist transformation in the 1990s but their image has increasingly been tarnished by regional bosses who put appear to put business interests first.

Under Necas, a conservative plasma physicist and father of four, the government won some praise from non-government organizations for tackling graft.

But its popularity plunged as Necas replaced 10 ministers, several of them due to graft scandals, and raised taxes and cut spending to bring the budget into line. That earned his party its worst-ever results in regional elections last month.

Necas started off with 118 deputies in the lower house in mid-2010. But the small centrist Public Affairs party split earlier this year and its leader Vit Barta, convicted of making improper loans to party colleagues, took most of its deputies into opposition, depriving the government of a clear majority.

That has made every parliamentary vote life-threatening, and gave teeth to the latest rebellion by six deputies.

The group had the backing from President Vaclav Klaus who has been increasingly critical of Necas's policies.

The rebellion also came after the Health Ministry had asked police to investigate dealings worth tens of millions of dollars at the country's largest public health insurance firm, where three of the six rebels hold posts. They denied any connection between the investigation and their rebellion.

In the end the dissenters failed to win wider acceptance in the party at a congress last weekend and, faced with the likelihood they would be kicked out of the party for bringing the cabinet down, they backed down. Three quit parliament, to be replaced by loyal substitutes.

A new problem for Necas arose immediately, as one of the replacements had been sentenced to a six-year prison term for bribery and is awaiting the verdict on an appeal.

One factor helping the cabinet is that independents who have peeled off the coalition have virtually no chance of being reelected, and therefore have an interest in avoiding an early election.

"There can be pretty much any reason (for a cabinet fall) - some additional cuts, taxes, change in some key policy, but also something trivial. The real reason usually is that party members are no longer able to work together," said Eurasia group analyst Otilia Simkova.

(Additional reporting by Robert Muller; editing by Andrew Roche)

Source: http://news.yahoo.com/czech-pm-wards-off-coalition-collapse-until-next-113959381--business.html

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