UPDATE 2-Czech govt wins confidence but seen as weak

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By Jan Korselt

The new Czech centre-right government led by Prime Minister Mirek Topolanek narrowly won a confidence vote on Friday, but its weak position in parliament will hamper 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 the support of two opposition deputies who did not attend the vote, giving him a victory over the 97 opposition votes.

One deputy abstained from voting, but was present in the lower house.

"This is about (approving) a government that has agreed on the maximum possible reforms," Topolanek told the lower house ahead of the vote.

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

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

But the government will 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. (Additional reporting by Jan Lopatka and Alan Crosby) ((prague.newsroom@reuters.com; Reuters Messaging: jan.lopatka.reuters.com@reuters.net; +420-224 190 474; editing by Steve Pagani))

Keywords: CZECH GOVERNMENT/

[PRAGUE/Reuters/Finance.cz]