UPDATE 4-Slovak PM turns up heat on coalition partner

...

By Martin Dokoupil

Slovak Prime Minister Robert Fico told his farm minister on Thursday to quit or be sacked because of accusations of corruption in his department, a step that could break up the ruling coalition and sink the cabinet.

Fico told the minister, Miroslav Jurena of the centre-left Movement for a Democratic Slovakia (HZDS), to take political responsibility for disputed land transfers that have opened new rifts in the fractious three-party government.

A break-up of the coalition, led by Fico's leftist Smer party, would strip the cabinet of its parliamentary majority and could lead to its collapse at a crucial time in its drive to join the euro currency zone in 2009.

"I prefer solving this scandal at any cost, and I repeat at any cost," Fico told a news conference.

"Transparency and the cleanliness of this government coalition and this government is more important for me than maintaining the existence of this government."

Fico said he would ask the president on Friday for Jurena's dismissal unless he quit of his own accord.

Jurena said HZDS chiefs would decide at a meeting later on Thursday whether the party would yield to Fico's demands or quit the coalition. "The party leadership will decide whether only I quit or whether the HZDS party leaves the coalition as a whole," he told TA3 television.

The scandal concerns a land administration agency, supervised by Jurena, whose acting boss approved deals returning land confiscated during the communist era which ended in 1989.

Local media reported that a company close to the HZDS acquired the land for a fraction of its market value.

CLIMBDOWN EXPECTED

Fico plans to step up diplomatic efforts to win backing for Slovakia to adopt the euro single currency in 2009, and a lengthy government crisis could harm the economic discipline needed for euro zone membership.

Fico formed the coalition with the HZDS and the Slovak National Party after a parliamentary election in June 2006. The next election is due in 2010.

A government collapse, which could happen if the HZDS and opposition parties joined forces for a no-confidence vote, would not automatically lead to an early election, as parties may try to form a new cabinet before polls are called.

Surveys show Smer is the most popular party with more than 40 percent support, so an early election might not harm Fico, while support for the HZDS has been falling.

Analysts said HZDS chief and former prime minister Vladimir Meciar would likely back down now but try to regain ground later, threatening the coalition in the long run.

"The HZDS returned to the government after eight years and I do not expect its chairman to go for a radical solution and take the HZDS into the opposition," commentator Marian Lesko said.

The Slovak crown dropped to a one-month low of 33.600 to the euro from 33.450 on Wednesday, but traders said this stemmed from rising aversion to risk rather than political tension.

Traders said the crown would not be too sensitive to political turmoil unless it started threatening euro entry.

(Additional reporting by Martin Santa, writing by Jan Lopatka; Editing by Tim Pearce)

Keywords: SLOVAKIA COALITION/

[BRATISLAVA/Reuters/Finance.cz]