CZECH REPUBLIC: President Vaclav Klaus increased the likelihood of early elections in the Czech Republic yesterday by refusing to appoint a cabinet that would rely on the Communists.
Mr Klaus made his position clear before talks today to find a replacement for Prime Minister Vladimir Spidla, who stepped down after poor results in European Parliament elections this month.
The president told the daily Mlada fronta Dnes, in comments confirmed by his spokesman, that he thought it would be impossible to form a stable government from the outgoing three coalition parties, due to weak support in parliament.
Mr Spidla, a Social Democrat who became unpopular over budget spending cuts, said he would formally quit after a cabinet session late yesterday.
Mr Klaus's stance may help soothe markets which fear that the new Social Democrat leader, Mr Stanislav Gross, may reach out to the Communists for help if he fails to build a new cabinet with two centre-right allies in the outgoing coalition.
"The government . . . has since 1998, meaning for six years, relied on the Communist votes in a number of (parliamentary) votes. And this will surely continue," Mr Klaus told the daily.
"But I do not think it is possible to have a confidence vote in a (new) government based on this," said the president, who is widely expected to choose Mr Gross as the next prime minister because his party is the biggest group in parliament.
The Communists are against the current coalition's fiscal reform course aimed at euro adoption by 2010 and analysts said their rise to power would spark a sell-off in Czech assets.
Under the constitution, Mr Klaus has two attempts to choose the next premier. If both fail to win confidence in parliament, Mr Klaus would appoint a third choice proposed by the speaker of parliament, a Social Democrat.
This keeps some chance of Communist involvement alive if the Social Democrats were to pick a nominee preferring such an option. Mr Klaus's spokesman declined to speculate.
Mr Gross says he wants to do without Communist support and prefers to stay in the current coalition with the centrist Christian Democrats and the right-wing Freedom Union.
The coalition - still far from a deal on a new cabinet - has only 99 votes in the 200-seat lower house, forcing Mr Gross to scrape other votes from defectors or the opposition.
One independent has said he was considering joining the Freedom Union, in the doldrums after two defections on Tuesday.
Mr Klaus said he believed the coalition was not a solution without a firm, even if very slim, majority.
"In some constellation it is possible for a cabinet to exist with a majority of 101 to 99, but . . . the assumption of a 100 per cent unity among 70 Social Democrat deputies is also risky," he said.
Mr Klaus is the former chief of opposition Civic Democrats (ODS), who want early polls before the current term ends in 2006.
Elections can be called if three attempts to form a cabinet fail, or if three-fifths of parliament agree to hold them.