Czech labor minister resigns after police charge deputy

PRAGUE Wed Oct 3, 2012 10:13am EDT

Czech Republic's Labour and Social Affairs Minister Jaromir Drabek speaks during an interview with Reuters at his office in Prague February 24, 2011. REUTERS/David W Cerny

Czech Republic's Labour and Social Affairs Minister Jaromir Drabek speaks during an interview with Reuters at his office in Prague February 24, 2011.

Credit: Reuters/David W Cerny

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PRAGUE (Reuters) - Czech Labor and Social Affairs Minister Jaromir Drabek resigned on Wednesday after police charged his first deputy with bribery, another blow to the centre-right government already weakened by corruption scandals in the past year.

Prime Minister Petr Necas's cabinet is facing the threat of collapse after defections in parliament and a rebellion by ruling party backbenchers who refuse to back the government's main tax and pension policy changes.

Police charged Deputy Labor Minister Vladimir Siska with bribery on Monday. A court ordered on Wednesday his detention until trial. Drabek said he believed Siska, his former long-term business partner, would be cleared.

"I do not feel any guilt but I am ready to bear the political responsibility," Drabek, a deputy chief of the junior government member, the conservative TOP09 party, told reporters.

Drabek said his resignation would take effect at the end of October.

Under Drabek, the government pushed through cuts in welfare, slowed down indexation of pensions and adopted pension reform aimed at boosting private savings for retirement.

The pension reform has however been halted at the last moment by President Vaclav Klaus, who sent back to parliament a technical law allowing the reform to start in January next year.

Analysts see Klaus's steps as an attack on the cabinet.

The government has lost popularity due to its austerity drive, that has been praised by investors, and a string of sleaze scandals. Drabek's departure is the 10th loss in the 16-member cabinet halfway into its four-year term.

Necas faces new votes in parliament on the pension law as well as plans to hike value-added and income taxes, which he sees as necessary to cut the budget deficit below 3 percent of gross domestic product next year.

Following a split in a junior coalition party, the government has only 100 votes in the 200-seat lower house of parliament. It also faces a rebellion by a handful of deputies from Necas's Civic Democratic Party that is threatening to sink the tax plans and the cabinet with it.

Ruling parties also face the prospect of a drubbing in regional elections on October 12-13, with leftist opposition Social Democrats and Communists leading polls.

(Reporting by Jan Lopatka; Editing by Alison Williams)

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