RPT-Czech talks on broad coalition cabinet collapse

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By Jan Korselt

Talks on forming a broad coalition government in the Czech Republic collapsed on Wednesday after Prime Minister Mirek Topolanek's rightist Civic Democratic Party ended negotiations with his leftist rivals.

The country has been without a stable government for over six months after centre-right and leftist parties each won 100 seats in the 200-seat lower house in a June general election.

Topolanek and his party had been leading talks with the leftist Social Democratic Party and centrist Christian Democrats to form a government.

But differences over policy issues such as taxes and the make-up of the cabinet were too great to overcome.

"The executive council decided, under these conditions, not to continue in the negotiations on government with the Social Democrats," Topolanek told a news conference.

Deputy party chief Pavel Bem said the Civic Democrats will try to renew talks on forming a three-party centre-right cabinet with the Christian Democrats and the Green Party, which would have 100 seats in parliament.

Such a government would need at least one Social Democrat deputy to cross the floor and support the government in a confidence vote mandated by the constitution.

Two Social Democrats have quit their party faction and now sit as independents, opening prospects for such a possibility.

However, the Christian Democrats have rejected such an approach saying it would smack of corruption, and President Vaclav Klaus also said he would not approve a government propped up by defectors rather than a standard political agreement.

Other Civic Democrat officials said they may try to form a minority cabinet with the Christian Democrats which would be supported by the left.

"The Social Democrats would have to allow, in some form of tolerance, the establishment of such a cabinet," said Civic Democratic deputy chief Petr Gandalovic.

CABINET ON FRIDAY?

Social Democratic vice-chairman Bohuslav Sobotka said talks on supporting a right-wing government would "hardly lead to any reasonable result".

"We regret that the Civic Democrats are doing this," he told Reuters, adding his party remained ready to negotiate on the broad coalition.

Topolanek, head of a minority government which lost a confidence vote in October, has given himself until Friday to present President Klaus with the line-up of a new cabinet, whatever the result of talks.

If his new cabinet also loses a confidence vote, one more attempt to form a government will take place before the president can call an early election.

Czechs are increasingly upset over the crisis, blaming politicians from all parties for failing to put aside their differences to create a government that will deal with important issues such as pensions and healthcare reforms.

However, the economy has continued to roll along with strong growth, record strong currency, easing unemployment and inflation below the central bank's target range.

Earlier on Wednesday parliament approved the 2007 state budget as parliamentary deputies from both sides of the floor voted for the legislation.

((Writing by Jan Lopatka and Alan Crosby; editing by Myra MacDonald; prague.newsroom@reuters.com; Reuters Messaging: jan.lopatka.reuters.com@reuters.net; +420-224 190 474))

Keywords: CZECH POLITICS/

[PRAGUE/Reuters/Finance.cz]