Czech Ruling Parties to Meet With Necas on Brink Amid Spy Affair

The Czech Republic’s three ruling parties will meet today to discuss the future of the government, with a scandal over spying and bribery throwing the fate of Prime Minister Petr Necas into question.

Necas’s position eroded yesterday after the junior coalition party TOP09 stopped short of backing him, while saying the Cabinet should continue until the 2014 elections. The premier has refused to resign, prompting the poll-leading opposition to call a no-confidence vote for June 18, with hopes of forcing a snap ballot.

The government of Necas, 48, has been rocked by a scandal that erupted on June 13 after nighttime police raids resulted in the detention of eight people including Jana Nagyova, the head of his office. She is charged with abuse of power in ordering the illegal surveillance of three people and is linked to a bribery case, in which prosecutors say former members of parliament were offered jobs at state-controlled companies.

“Everything is possible in life, as you know,” Karel Schwarzenberg, the head of TOP09 who also serves as foreign minister, told reporters yesterday. “We first need to discuss details with our coalition partners how the government of fiscal responsibility should look like. We created this government, and we have to finish our work until the election term ends.”

Necas is entering his fourth year in power after quelling a revolt over austerity in his Civic Democratic Party to become the longest-serving Czech premier in a decade. Nagyova can’t stay in her job after a court ordered her to remain in detention following charges of abuse of power, he said in a statement yesterday.

Koruna Drops

The koruna weakened 0.2 percent to 25.743 per euro on June 14, after losing 0.5 percent on June 13, the biggest retreat among the world’s 31 major currencies tracked by Bloomberg, after the raids on government offices took place. The benchmark PX stock index fell for a fifth day to close the week 3.1 percent lower at a 10-month low.

Nagyova, who has worked with Necas since at least 2006, was charged along with seven other people including the former and current heads of military intelligence. During the raids, officers from the organized crime police unit seized as much as 150 million koruna ($7.8 million) in cash and some gold after raiding 31 homes.

To survive the no-confidence vote, Necas needs to rally the support of at least half of the deputies in the 200-member parliament. The three-party ruling coalition controls 97 seats and has been relying on support from its former deputies who defected their parties.

‘Very Difficult’

The executive council of Necas’s party on June 14 voted to back his premiership. The body voted by a ratio of two-to-one for the decision, Necas said.

“The situation is very hard, very difficult, and the fact that there were both positive and negative voices is natural in this situation,” Necas said after the meeting, adding that the voting showed “decent support” for him.

The Czech Republic, a former communist country, ranked 54th of 174 countries in Transparency International’s 2012 corruption perception index, tied with Latvia, Malaysia and Turkey. In the 27-member European Union, only Slovakia, Romania, Italy, Bulgaria and Greece did worse.

Civil servants and military officials were charged with abuse of power, while other detainees were charged with bribery and corruption, prosecutor Ivo Istvan said. In the bribery case, ex-lawmakers were offered jobs in state-owned companies, according to Istvan.

‘Private’ Matter

Nagyova illegally asked intelligence officers to spy on a person in a “private” matter, Istvan said, without identifying the victim. He didn’t elaborate on other victims. She faces as much as five years in prison if convicted, according to Robert Slachta, the head of the police organized crime unit. Nagyova will appeal the court decision to keep her in custody, CTK reported, citing her attorney Eduard Bruna.

“I never decided on, and I wasn’t informed about the alleged following of people whose names are being mentioned in the media,” Necas said in a statement. “Even though I wasn’t aware of this action, I am deeply sorry about it and I apologize to all who were to be affected.”

Prosecutors suspect that one of the detainees, a former head of military intelligence service, was involved in spying on Necas’ wife, which was ordered by Nagyova, CTK reported, citing attorney Tomas Sokol. Necas, who is separated from his wife, said in a statement on June 11 that the couple had agreed to an uncontested divorce.

The Social Democrats, the largest opposition party that leads in opinion polls a year before elections, joined the Communist Party in calling for Necas’s resignation. Parliamentary Speaker Miroslava Nemcova set the preliminary date for a vote against the Cabinet for June 18 in a special session that starts at 2 p.m.

President Milos Zeman, a critic of the government and a Social Democratic prime minister from 1998 to 2002, said the charges are “very serious” and are backed by sufficient evidence, CTK quoted him as saying yesterday.

To contact the reporter on this story: Peter Laca in Prague at placa@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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