UPDATE 1-Czech govt to win confidence but weak power grip

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By Jan Lopatka

The new Czech centre-right government led by Prime Minister Mirek Topolanek looked set to win a confidence vote on Friday, but a weak mandate will hamper its reform plans and may lead to an early election.

Topolanek's three-party coalition commands just 100 votes in the 200-seat lower house of parliament. But he secured a pledge by two opposition deputies to abstain to give him a majority in voting expected later in the day.

"This is about (approving) a government that has agreed on the maximum possible reforms," Topolanek told the lower house in his opening speech.

"Either we will push through reforms, or else let an early election decide on the future direction (of the country)."

A victory would end a political crisis which has crippled policy-making in the EU member since an election last June split parliament evenly between centre-right and left-wing forces.

It is also a win for the 50-year-old Topolanek, who out- manoeuvred the leftists who said after the elections that he "wouldn't be able to wash his hands" without their approval.

However, the government may find it difficult to push through its liberal economic reform agenda, such as tax cuts, pension and health reform and a reduction in welfare spending.

The central European country of 10 million people needs to reverse a trend of deepening budget deficits which have pushed plans to adopt the euro beyond 2010.

The two rebels, who split from the leftist Social Democrat caucus, have not promised to back any legislation and analysts said political instability may persist in the coming months.

SOCIALLY SENSITIVE

Earlier on Friday they signed a statement along with the government saying their support was only a move to end the stalemate, and that neither deputy was promised anything in return for their indirect support, other than that the reforms would be socially sensitive.

"If the government wants to carry out real reforms, then the probability it will remain in power is very small," said political analyst Pavel Saradin. "If it wants to perform only half-baked reforms that will please all ... it may function for the entire election period (until 2010)."

The ruling coalition, made up of Topolanek's right-wing Civic Democrats, the centrist Christian Democrats and the Green Party, has agreed it would try to trigger an early election if the opposition blocks it from carrying out its plans.

Not only will the government lack a parliamentary majority, but it will also be strained by internal differences on key issues such as energy policy -- the Greens adamantly oppose building new nuclear power plants and expanding coal mines, while the Civic Democrats see a future in atomic energy.

Saradin said that for the Civic Democrats it would be favourable to hold an election as soon as possible before the public starts perceiving them as a weak government.

While the Social Democrats are against many of the government's proposed tax and social reforms, they are under pressure to ensure the government survives for a longer period of time since the leftists trail badly in opinion polls.

Social Democrat chief Jiri Paroubek said the proposed reforms were anti-social and dangerous for the public finances, and his party would not back them unless they are altered.

[PRAGUE/Reuters/Finance.cz]