* Klaus seeks quick solution to crisis, will not allow limbo
* Says govt must have majority support
* Pressure on main government, opposition parties to agree
(Adds analyst, background)
By Jan Korselt
PRAGUE, March 26 (Reuters) - Czech President Vaclav Klaus
accepted Prime Minister Mirek Topolanek's resignation on
Thursday and said a new majority-backed cabinet must be formed
soon to tackle the economic crisis and the Czech EU presidency.
But Klaus set conditions that would likely require a deal
between the two main parties and could be difficult to reach.
Topolanek quit after several government defectors joined
forces with the leftist opposition in a no-confidence vote on
Tuesday, toppling the minority cabinet amid a severe economic
downturn and halfway through the six-month EU leadership term.
The eurosceptic Klaus, a political rival to Topolanek and
the former leader of his right-wing Civic Democrats, has the
sole right to appoint the new prime minister and until the
nominee forms his cabinet, the old centre-right three-party
administration will remain in office.
The main parties have said a new cabinet should lead the
country toward an early election.
"The solution must be quick ... due to the economic crisis
and the EU presidency, which must be run by a fully functioning
government," Klaus told reporters.
That statement went against suggestions by both government
and opposition leaders that Topolanek's team might stay on, even
after the resignation, until the end of the presidency in June.
Analysts have said that changing the government during the
presidency could weaken its clout, as new ministers would face a
tough time leading the EU agenda without prior experience.
Klaus has played down the presidency and said the EU's big
powers call the shots anyway. But Topolanek's fall has not
helped his chances of playing a serious role in consensus
building on issues like the economy and ties with Washington.
Analysts said that was also damaged on Wednesday when he
branded U.S. plans to spend trillions of dollars to boost the
economy as the "road to hell".
The political crisis has had a limited impact on financial
markets. The crown dipped after the no-confidence vote but came
back to trade 27.10 to the euro on Thursday, almost flat from
before the vote.
Cabinets in Latvia and Hungary have collapsed under pressure
from the financial crisis, although that has had a smaller
impact in the Czech Republic, where the government was felled by
personal rivalries in Topolanek's party and within a junior
coalition partner, the Greens.
The opposition has blamed the government for economic
mismanagement and criticised reforms including a flat income
tax, small fees for doctor visits and welfare cuts. The
opposition Social Democrats propose raising spending to fight
the economic crisis which will lead the Czech economy into
recession this year.
TOUGH CONDITIONS
Klaus said any government would have to be based on the
support of political parties, and not defectors -- a clear
indication he would not back a recreation of Topolanek's
three-party minority cabinet, which was initially backed by two
rebels from opposition ranks.
"I am ready to appoint only a government that will be based
on a political agreement in the lower house," Klaus said.
He said he could reappoint Topolanek, or name someone else
with the ability to secure the required majority backing.
Given the parties' power in parliament, it will be difficult
to form a majority-backed government without an agreement
between the two biggest parties, the Civic Democrats and the
Social Democrats.
"This means that any solution -- be it a political
government, a caretaker government or early election -- is
dependent on some form of cooperation between the Civic and
Social Democrats," said Tomas Lebeda, analyst at the Czech
Academy of Sciences.
So far, the only common ground appears to be a preference
for an election before the next scheduled polls in mid-2010.
The constitution makes it hard to organise early elections,
and analysts have predicted a protracted political stalemate.
The Social Democrats want a government of non-partisan
experts until early elections this autumn or spring next year.
The Civic Democrats insist only Topolanek can lead the new
cabinet, and an election should be called in the summer.
"I am also in favour of speed," Topolanek said after meeting
Klaus. "But not just speed of forming a cabinet but also speed
of arranging an early election as the only way out."
The government stalemate has cast a shadow over the
ratification of the EU's Lisbon treaty, meant to streamline
decision-making in the bloc which has grown from 15 to 27
members in the past five years.
It has been approved in most European countries but has been
stuck in the Czech upper house, the Senate, where many Civic
Democrats -- cheered on by Klaus -- oppose it.
Deputy Prime Minister Alexandr Vondra said on Wednesday it
would be tougher to convince them to support the treaty after
the government's collapse.
(Writing by Jan Lopatka; editing by Janet Lawrence)
