UPDATE 1-Slovak HZDS party stays in govt, tension remains

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By Peter Laca

RUZOMBEROK, Slovakia, Slovak HZDS party agreed on Saturday to stay in government despite a deep rift with Prime Minister Robert Fico, but tensions threatening to break up the ruling coalition remained high.

The centrist Movement for a Democratic Slovakia (HZDS) clashed with Fico's leftist Smer party after he sacked HZDS Farm Minister Miroslav Jurena on Friday over land deals in which the state may have lost tens of millions of dollars.

The crisis threatens to strip the centre-left government of its parliamentary majority at a crucial time for the central European EU member's drive to adopt the euro in 2009 and a few days before a parliamentary vote on next year's budget.

HZDS agreed at a congress on Saturday to stay in government, but it stopped short of pledging full loyalty to Fico's leftist Smer party, which will be tested in a no-confidence vote in parliament speaker Pavol Paska of Smer on Monday.

"There is still a very long time until Monday," HZDS Deputy Chairman Milan Urbani told journalist after the congress in the northern Slovak town of Ruzomberok. "A political decision on this matter will be taken before the session on Monday."

Some analysts have said HZDS may team up with the opposition to dismiss the head of parliament to retaliate for the farm minister's dismissal.

Fico said Paska's removal would break up the coalition.

"I am saying this very openly ... if Pavol Paska falls, the entire coalition falls," Fico told the public Slovak Radio.

Eleven government deputies would have to join the opposition in the secret vote on Monday to muster the 76 votes necessary to dismiss Paska. HZDS has 16 deputies.

If the coalition disintegrates, Fico could try to rule in a minority, hoping to win ad-hoc support of MPs.

If he failed and the cabinet collapsed, parties may try to form another coalition, or agree on an early election.

The coalition row broke out after a land administration agency, supervised by the farm minister, signed deals to return land confiscated during the communist era that ended in 1989.

Media reported a company close to the HZDS then acquired the land for a fraction of its market value. Fico called the land transfers scandalous, but Jurena has denied any wrongdoing.

Dag Danis, a columnist at the daily Pravda, said coalition relations would remain turbulent, saying HZDS "would certainly not be a calm and loyal partner."

(Writing by Peter Laca)

Keywords: SLOVAKIA COALITION/

[Reuters/Finance.cz]