INTERVIEW-Czech PM sees rocky 2008 over pension reform

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Czech pension reforms are vital for the country and the centre-right government could fall if it fails to push them through parliament, Prime Minister Mirek Topolanek said.

Topolanek, the 51-year old leader of the right-wing Civic Democrats (ODS), said his often shaky three-party coalition could also face difficulties next year over a presidential election as well as regional and upper house polls.

But he was confident of parliamentary support for hosting a U.S. missile defence base.

The central European EU country's government, which includes Topolanek's party, the Greens and the centrist Christian Democrats (KDU-CSL), has just 100 seats in the 200-seat lower house of parliament, making every policy vote a cliff-hanger.

Topolanek aims to present the first stage of pension reform -- extending the retirement age to 65 from 63 -- to parliament early next year, and hopes for broad political consensus.

"I take the health and pension reform as a necessary condition for this government to continue, and if we do not succeed in that, the reform ethos would be lost and the existence of this cabinet threatened," Topolanek said in an interview conducted on Tuesday.

He said the cabinet would not fall automatically, however, should it fail to pass the reform.

After months of wrangling, parliament approved the biggest tax and welfare overhaul since the early 1990s in September, cutting personal and corporate taxes while raising sales taxes and reducing welfare with the aim to slash the budget gap.

Topolanek was confident parliament would ratify a plan to host part of a U.S. missile defence shield despite opposition from Russia, most Czechs, the opposition and uncertainty backing from the Greens.

"This is a geopolitical interest that will certainly win support not only from the coalition deputies," he said.

PRESIDENTIAL TEST

Topolanek said the presidential election by both houses of parliament in February could be a turning point for the government.

The president does not have much executive power, but becomes a key figure during elections and at times of political crisis. Former Civic Democrat chief Vaclav Klaus will seek a second 5-year term.

"A failure to elect Vaclav Klaus would very much complicate the situation of the government," Topolanek said. "It does not mean a government collapse, but it means a complication."

Klaus is favourite but cannot be entirely sure of success. If all Civic Democrat deputies and Senators voted in favour, he would need 19 extra backers among the 281 members of parliament.

The leftist opposition Social Democrats and the coalition Greens back unaffiliated economist Jan Svejnar, who might announce his candidacy next week.

Topolanek's internal critics may also raise their voices if the Civic Democrats, who trail the Social Democrats in opinion polls, fare poorly in regional and Senate elections in the autumn.

(Editing by Matthew Tostevin)

Keywords: CZECH TOPOLANEK/

[PRAGUE/Reuters/Finance.cz]