PRAGUE (Reuters) - The Czech Social Democratic party (CSSD) is ready to walk away from talks after the ANO party of Prime Minister Andrej Babis rejected its proposals on forming a coalition government, party leader Jan Hamacek said on Thursday.
Hamacek told reporters he would recommend his party leadership end talks with ANO when it meets on Friday.
ANO was the clear winner in an election last October, but lacks a majority in parliament where it lost a confidence vote in January, leaving it in a caretaker position as it scrambles to gain partners for a new attempt at forming a government.
President Milos Zeman gave Babis until the end of June to create a viable government, most probably leaning on the Communist party for a majority in parliament.
The Communists, who were forced to give up power in the 1989 ‘Velvet Revolution’, had said they could support a government of ANO and CSSD from the outside, although with some demands regarding some ministerial appointments.
After the talks between ANO and CSSD broke down on Thursday, the Communist party said it was up to Zeman and Babis to say what should happen next.
After talking since February, the ANO and CSSD had found common ground on an agenda but had yet to agree on cabinet posts.
“ANO refused our constructive offers ... We have nothing left but propose at tomorrow’s leadership meeting to end talks with ANO on government cooperation,” Hamacek said.
The party had sought the Interior or Finance Ministry as Babis, a billionaire businessman, faces criminal charges over an alleged fraud a decade ago involving European Union subsidies worth 2 million euros. He has denied any wrongdoing.
Markets have largely shrugged off the protracted stalemate with yields on domestic bonds remaining low as the Czech economy grew by 4.6 percent in 2017 and public finances recorded a second surplus in a row last year.
Other parties have refused to cooperate with an ANO government led by Babis, although the Social Democrats said in late March they would be willing to join his cabinet if they controlled one of the ministries they sought.
Speaking afterward, Babis said his party offered up to five ministries, including the Justice Ministry.
“I think that our (party) has shown great flexibility and tolerance,” he told reporters. “We have done our best. The stance of CSSD surprised us, we are sorry for that and unfortunately, our generous offer was not accepted.”
ANO could also try to seek support for its minority government from the Communists and the far-right, anti-EU SPD party. Although these parties have joined forces in the lower chamber of parliament when filling some posts, reaching any form of government cooperation deal would be difficult due to internal opposition within the parties.
Reporting by Robert Muller and Jason Hovet; editing by Andrew Roche and James Dalgleish