UPDATE 2-Czech president picks leftist PM in snub to majority

Tue Jun 25, 2013 11:50am EDT

Related Topics

* Uncertainty ahead as new PM has little chance to win confidence

* Outgoing centre-right coalition claims narrow majority

* Early election is an option, but plan lacks support for now

By Jana Mlcochova and Jan Lopatka

PRAGUE, June 25 (Reuters) - Czech President Milos Zeman snubbed the outgoing centre-right coalition by appointing left-wing economist Jiri Rusnok as prime minister on Tuesday, in a step likely to prolong political turmoil by weeks or even months.

The central European country is looking for a new government after Prime Minister Petr Necas quit last week when an aide was charged with bribery and illegal spying as part of the biggest anti-corruption sweep since the fall of communism in 1989.

Rusnok, who served as a finance and industry minister in 2001-2003, including in a government led by Zeman, said he would take two weeks to form a non-party-based cabinet of experts.

But his rule may only be counted in weeks as parties wrestle for dominance with the leftist president, throwing into doubt the 2014 budget and a plan to build a new nuclear power plant.

The outgoing coalition said it had a firm majority with 101 seats in the 200-member lower house. It said it would shoot down Rusnok's government in a required vote of confidence, and continue to push for a new centre-right cabinet.

"This is a stillborn baby," said lower house speaker Miroslava Nemcova, the coalition's candidate for prime minister. "This is an expression of disrespect to parliament, an irresponsible step."

Zeman, a former prime minister who won the country's first-ever direct presidential election in January, said he had a duty to his voters to stop the coalition.

"I have expressed the opinion that the government of Prime Minister Necas should finish. If I am to stick with that opinion, I have to take steps...to make this happen," he said.

EARLY ELECTION?

Under the constitution, presidents have the sole right to appoint prime ministers, but traditionally they have done that in cooperation with parties that have a majority in parliament.

Zeman said Rusnok, a 52-year-old pension fund director for bank ING, may only be in office until September if parliament decides to hold an election before its term ends next May.

This would be welcomed by the opposition Social Democrats, who lead opinion polls by a wide margin, and the far-left Communists. But the plan needs 120 votes in parliament, and those votes do not appear to be available, at least for now.

The conservative TOP09, a partner in the outgoing coalition, had said in the past several days it might join calls for early elections. But on Tuesday it backed the often wobbly coalition after it gathered the needed support.

"If the coalition did not have a majority, we see a quick election as the outcome. But when it has a majority, it has legitimacy to rule," Miroslav Kalousek, the finance minister and TOP09 deputy chief, told Reuters.

He put pressure on Rusnok, saying his government would not be able to push the 2014 budget through parliament. That would force the country to start next year with an emergency budget.

The crown, which has been resilient in the face of frequent political crises, was unchanged on the news at 25.82 to the euro.

NUCLEAR TENDER

If Rusnok fails to win confidence, and parliament at the same time does not dissolve itself, the ball will go back to Zeman to appoint another prime minister.

The president said he would consider the coalition's 101 votes in such a case, although he will have a free hand again to pick who he wants. He may also delay a decision and leave Rusnok to rule in a caretaker capacity for some time.

The country needs a government able to formulate a policy that will help it emerge from nearly two years of recession.

The state is also nearing a decision on its biggest-ever investment deal: a plan to build a $10-15 billion nuclear power plant. Russian and U.S. firms are competing in a tender that has economic, political and strategic importance. Rusnok refused to comment on it, saying he first needed to study the matter.

In the scandal that toppled Necas, police have charged eight people including his closest aide Jana Nagyova.

Nagyova is in custody charged with ordering illegal spying. Prosecutors also accuse her of offering bribes, in the form of posts at state companies, to three parliamentary deputies last year in exchange for abandoning a rebellion against Necas. A lawyer for Nagyova said she had acted in good faith.

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