* PM to seek support ahead of Tuesday's no-confidence vote
* Early polls a possibility if government loses
(Adds economic background, analyst)
By Jan Korselt
PRAGUE, March 23 (Reuters) - Czech Prime Minister Mirek
Topolanek said on Monday he would seek support from independent
deputies to avoid losing a no-confidence vote on Tuesday, but
acknowledged the possibility of defeat and an early election.
Following defections from his camp, the leftist opposition
Social Democrats have their best chance to dislodge Topolanek
midway through the country's EU presidency, after several
previous failures to topple the minority centre-right cabinet.
Topolanek said he would talk to two rebels expelled from the
Green Party, a junior coalition partner, to persuade them not to
join the opposition in the vote.
"Any political instability will only deepen uncertainty and
concerns, and will hurt the chances of successfully overcoming
the consequences of the economic crisis," he told reporters.
Under the Czech constitution, the government would stay in
power even if it loses the vote until a new cabinet is appointed
or parties agree on an early parliamentary election, which could
take months. The EU presidency runs until June.
But ousting the cabinet would hinder policymaking in a
severe economic downturn, threaten efforts to ratify the EU's
Lisbon treaty, and may affect plans to set a euro entry date.
Topolanek said he believed he would win but refused to
predict the outcome, acknowledging the possibility of defeat in
the finely balanced parliament.
The test for the Czech government comes just days after
Hungarian Prime Minister Ferenc Gyurcsany said he would step
down to allow a new cabinet to handle the economic crisis.
Governments in Iceland and Latvia have also collapsed.
Riven by infighting and defections, the Czech government
appeared wobbly even before the financial crisis, which has
triggered a slump in demand for exports. Central bank chief
Zdenek Tuma told Monday's Financial Times the economy may shrink
by 2 percent this year [].
Industrial output plunged by 23.3 percent, year-on-year, in
January, but the banking sector has held strong and households
are not exposed to foreign currency debt [].
"The government has always been weak, and it has survived
many of these votes. It is likely to do so again, but the chance
that it won't is significantly higher than at previous votes,"
said Jon Levy of Eurasia Group.
He said a government fall would stall the ruling party's
fiscal reforms, already hurt by the government's minority
position, and may complicate a plan to set a euro entry date
this November.
TIGHT VOTE
The government has 96 seats in the lower house, following
defections by members of Topolanek's own party as well as the
two Green deputies. The opposition has 97, making independent
votes key. The opposition needs 101 votes to topple the
government.
If the government loses, Topolanek said President Vaclav
Klaus should ask him again -- as the head of the strongest party
in parliament -- to form a new administration.
Topolanek's Civic Democrats will not support the formation
of a cabinet of unaffiliated experts rather than politicians, as
proposed by the opposition, and would rather call an early
election. Polls would normally be held in mid-2010.
"In case the government does not win ... tomorrow, and if it
is not possible to form a new cabinet without support from the
Communists, then the Civic Democrats clearly support the fastest
possible way toward an early election, as soon as the summer of
this year," he said.
The opposition has called for an election in the autumn or
in the spring of next year.
