UPDATE 2-Slovak PM sacks minister, coalition tension rises

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By Peter Laca

Slovak Prime Minister Robert Fico asked the president on Friday to dismiss Farm Minister Miroslav Jurena, deepening a row that may break up the ruling coalition.

Fico wants Jurena to quit because of allegations that land deals overseen by his department cost the state tens of millions of dollars.

Vladimir Meciar, the head of Jurena's centre-left Movement for a Democratic Slovakia (HZDS), said the party would decide at a special congress on Saturday whether to pull out of the three-party ruling coalition.

He said he expected the coalition, dominated by Fico's leftist Smer with the HZDS and the far-right Slovak National Party (SNS) as junior partners, to break up.

This would strip Fico of a parliamentary majority, destabilising his cabinet at a crucial time in his drive to adopt the euro currency in 2009.

President Ivan Gasparovic is obliged by the constitution to comply with Fico's request.

Fico said he wanted to keep the coalition together, but not at any cost.

"It is very bad if the HZDS ... is considering breaking a good welfare-oriented coalition only because of scandalous land transfers," Fico told reporters after meeting Gasparovic. "I care very much about this coalition but not at any cost."

MECIAR SEES BREAKUP

Meciar said the current make-up of the coalition was unsustainable.

"I do not think any more that this coalition is the only right (thing)," Meciar told the news television channel TA3. "Nor do I think that it is for the entire four years."

The HZDS will decide at an extraordinary national congress on Saturday whether to stay in the coalition.

An HZDS departure could bring down the government if the party teamed up with the opposition in a no-confidence vote, but even that would not automatically lead to an early election as parties can try to form a new cabinet in such a situation.

Most analysts expect Fico to survive, either with the HZDS, or in a minority with tacit support from deputies in parliament.

The coalition row erupted just days before parliament was to start debating the 2008 state budget. Its approval would need the consent of all ruling parties.

HZDS General Secretary Zdenka Kramplova has said the party will support the budget regardless of the row. Meciar did not say how the HZDS will behave in parliamentary votes.

The crown currency fell to a 5-week low on Friday of 33.750 to the euro but later recovered to Thursday's closing level of 33.55. Traders said investors were watching political developments but the reason for the drop was negative sentiment toward all currencies in central Europe.

The coalition dispute centres on a land administration agency, supervised by Jurena, whose acting boss approved deals to return land confiscated during the communist era that ended in 1989.

Local media reported that a company close to the HZDS acquired the land for a fraction of its market value. Jurena has denied any wrongdoing. (Reporting by Peter Laca; editing by Alan Crosby and Tim Pearce)

Keywords: SLOVAKIA COALITION/

[BRATISLAVA/Reuters/Finance.cz]