* PM candidate Sobotka says to focus on growth, employment
* Sobotka now must convince president to appoint cabinet
* FinMin candidate is owner of chemicals and media empire
* FACTBOX on coalition agreement
By Robert Muller and Jan Lopatka
PRAGUE, Jan 6 Three Czech political parties
signed an agreement on Monday to form a centre-left coalition
government that will aim to shore up economic growth by easing a
squeeze on state finances.
Under the agreement, Social Democrat leader Bohuslav
Sobotka, 42, will become prime minister, returning his party to
power after nearly eight years of centre-right rule in the
European Union member state.
Sobotka, a trained lawyer and career politician, must now
clear the final hurdle of convincing President Milos Zeman to
appoint his cabinet.
Czech economic growth has barely resumed after efforts to
hold down state debt made consumers and companies cautious about
spending, keeping the central European country in recession for
most of the past two years.
The proposed coalition, which also includes two centrist
parties, aims to keep the budget deficit below 3 percent of
gross domestic product but will not aim to cut the deficit as
planned by the previous administration.
"This (agreement) gives hope for a positive turnaround, for
supporting growth, strengthening employment... improving
stability and making people more satisfied with the overall
functioning of the country," Sobotka told reporters.
Sobotka has pledged to bring the country of 10.5 million
back into the European mainstream after a cool approach to the
EU by previous right-wing cabinets. But the Czech Republic is
not expected to adopt the euro before the end of this decade.
PRESIDENT IN FOCUS
Sobotka urged Zeman to swiftly approve the new cabinet amid
speculation that the president may drag out the process.
Zeman has roots in the same party as Sobotka but has long
been his political foe and has signalled that he may refuse some
of Sobotka's candidates for ministers.
"The president is not the fourth coalition party, he should
respect the will of the parliamentary majority...(He) should
help the cabinet come into existence in January," Sobotka said.
Zeman, who became the first directly elected Czech president
a year ago, has stretched the constitution to boost his own
limited powers. Last July, he appointed a caretaker cabinet of
his allies against the will of political parties, which remains
in power until he appoints the new cabinet.
Sobotka has been negotiating the formation of a government
since an early election in October. The previous centre-right
cabinet collapsed last June after police charged then-prime
minister Petr Necas's top aide with abuse of power.
That was just the latest in a string of scandals that have
plagued Czech politics. The country has had 12 governments in 21
years since the split of Czechoslovakia, often with a narrow or
no parliamentary majority.
The coalition will have 111 votes in the 200-seat lower
house of parliament, but its stability is not guaranteed.
The biggest question mark hangs over the newly created ANO
movement, one of the two centrist parties joining Sobotka's
Social Democrats in the coalition.
ANO came second in the October election under the leadership
of billionaire Andrej Babis, who based his campaign on public
anger with sleaze in the political establishment.
Babis is expected to take the finance ministry in the new
government, which also raises questions over potential conflict
of interest. Babis owns a web of over 200 companies, mostly in
the chemical, agricultural and media sectors.
Babis, 59, said he would focus on harnessing EU funds paid
out for projects in poorer regions of the bloc. The programmes
have caused a string of corruption scandals in the past.