Czech President Urges Cabinet Backing in Showdown With Lawmakers

Czech President Milos Zeman urged parliament to back the interim cabinet in a confidence vote as lawmakers of the previous pro-austerity administration oppose his attempts to shape government policies.

Zeman, the country’s first directly elected head of state, is promoting Prime Minister Jiri Rusnok, who he appointed against the will of the three former coalition parties that say they hold a majority in parliament. Zeman won’t name a replacement for Rusnok “for several weeks” even if he loses the vote, he told lawmakers in Prague today.

The rift prolongs political turmoil that started in June, when a scandal of illegal spying and graft allegations sank ex-Premier Petr Necas’s government. The parties that backed Necas are trying to return to power and plan to block Rusnok’s fiscal proposals. The poll-leading Social Democrats, the largest parliamentary group, want early elections as the $196 billion economy struggles to exit a record-long recession.

“We are in the middle of a political crisis that most of us didn’t cause, but we all need to cope with it,” Zeman said. “I proposed the only possible solution.”

The yield on 10-year government koruna debt, which reached an all-time low 1.48 percent on May 17, has risen since the start of the political crisis to 2.27 percent today, staying below comparable U.S. Treasuries, according to data compiled by Bloomberg.

The technocrat cabinet, which includes unsuccessful presidential candidate Jan Fischer as finance minister, needs a simple majority to survive the confidence vote. Rusnok wants to focus on restarting economic growth after six consecutive quarters of contraction through March.

Rusnok’s Backing

While two lawmakers excused themselves from today’s session, the threshold for winning the confidence motion will depend on how many deputies are present at the actual vote, according to parliament’s procedures.

Rusnok secured the backing of three parties with a combined 91 mandates, the Prague-based newspaper Hospodarske Noviny reported today. The former ruling coalition formally holds 98 seats and relied on unaffiliated deputies to push through laws when in power.

A motion to declare an existing parliamentary majority after the confidence vote takes place, was backed by 101 lawmakers of the former ruling coalition and unaffiliated deputies in the vote on the session’s agenda today, according to the result of the ballot.

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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