* Zeman says realistic cabinet will be formed this month
* Says he still has doubts about some ministerial candidates
* New government needed to end policymaking stalemate
* Economy struggling amid months of political paralysis (Adds quotes, background)
By Robert Muller and Jan Lopatka
PRAGUE, Jan 9 (Reuters) - Czech President Milos Zeman will appoint Social Democrat leader Bohuslav Sobotka as prime minister within days, he told Reuters on Thursday, opening the way for a centre-left coalition to try to revive the economy after months of political stalemate.
Zeman, in the first direct confirmation he would soon give the premiership to his longtime rival Sobotka, said he had reservations about some nominations for ministers, but it was “very realistic” to expect the full cabinet would be appointed by the end of the month.
The Czech Republic has been without an elected government since Prime Minister Petr Necas stepped down in June over a bribery and wiretapping scandal.
Critics of Zeman have accused him of dragging out the stalemate to keep the 42 year-old former finance minister Sobotka, with whom he has cool relations, out of office. In the months of political paralysis, the Czech economy has struggled to crawl out of a recession.
Zeman, a 69-year-old political heavyweight who won the country’s first direct presidential election a year ago, denied he was dragging his feet.
“Mr Sobotka has fulfilled all the conditions I had given to him,” Zeman said. “Therefore he will, of course, be appointed prime minister.”
Zeman, who walks with a stick after tripping on a rug in October, added that he had told Sobotka he would appoint him early next week.
The new Czech government, the first to be led by a Social Democrat since 2006, is expected to loosen budgetary policies slightly as it tries to help growth. Since the fall of Necas, the country has been run by a caretaker cabinet which lacked parliamentary support to take major steps for economic revival.
The country of 10.5 million has the highest credit rating in central Europe of AA- from Standard and Poor‘s. But economic growth has lagged central European neighbours for years and fiscal austerity has hurt Czechs’ incomes.
Under a deal signed on Jan. 6, Sobotka’s Social Democrats will form a coalition government with ANO, an anti-establishment movement led by a billionaire businessmen, and the centrist Christian Democrats.
In the interview conducted at his offices in the historic Prague castle, Zeman said he would make his reservations about some unspecified ministerial candidates public on Friday, at a news conference he called for 1200 GMT.
This will cause friction between the president and Sobotka, who has the right as prime minister to nominate individual ministers to the president, who then appoints them. It will also create a gap between the appointments of Sobotka and the rest of his team.
Zeman declined to say which candidates he had objections to, and whether they were so grave that he would refuse to appoint them to the cabinet. The president had earlier criticised Sobotka’s candidate for defence minister.
Zeman, himself a former Social Democrat prime minister who later split with the party, has had poor relations with Sobotka for a decade. This dates from when Sobotka and other Social Democrats thwarted Zeman’s first bid to become president, at a time when parliament elected the head of state.
Asked about their relationship and how would it affect the functioning of the next government, Zeman said he believed Sobotka was a professional and he would approach him like that.
Under the Czech constitution, most day-to-day executive power lies with the cabinet, but presidents can create serious obstacles if they disagree with government policies.
Zeman also said he would stick to his earlier demand that parliament must give initial approval to a new law on the public service before he appoints the chief of ANO, Andrej Babis, as finance minister.
Babis is fighting allegations that he was an informer for the secret police before the fall of Communism in 1989. That would disqualify him from the cabinet unless vetting rules set out in the law on public service are changed. The coalition has said it would comply with Zeman’s demand.
Babis was a Communist Party member but denies having been an informer for StB secret police. He admits only to having met agents when he worked for a trading firm in the 1980s. (Editing by Christian Lowe and David Stamp)