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Czech Premier Under Pressure After Police Raid His Offices

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Czech Prime Minister Petr Necas
Czech Prime Minister Petr Necas answers questions during a press conference at the Czech government headquarters in Prague on June 13, 2013. Photographer: Michal Cizek/AFP via Getty Images

June 13 (Bloomberg) -- Czech Prime Minister Petr Necas came under mounting pressure from the opposition after prosecutors and police raided government offices in a criminal investigation. The koruna weakened against the euro.

Necas told reporters in Prague today he had “no reason to resign” after the head of his office, Jana Nagyova, was among officials detained. Necas said his colleagues are innocent. Nagyova didn’t answer calls to her mobile phone. A police organized crime unit last night raided several government buildings, spokesman Pavel Hantak said.

Necas is entering his fourth year in power after having defeated a rebellion over austerity measures within his ODS party to become the longest-serving Czech premier in a decade. He now has to contend with an opposition emboldened by an opinion-poll lead a year before elections and with the threat of internal strife being rekindled within the cabinet.

“While Necas appeared defiant at today’s press conference, he is likely to face pressures within his own party ranks, where rifts have been deepening in recent months,” Otilia Simkova, an analyst at Eurasia Group in London, said in an e-mail today.

Koruna Slides

The koruna depreciated as much as 0.6 percent against the euro and was 0.5 percent weaker at 25.711 as of 5:54 p.m. in Prague, the worst performance among more than 20 emerging-market currencies tracked by Bloomberg. The benchmark PX stock index fell 0.7 percent, declining for a fourth day to 927.98, its lowest close since August 2012.

The lower house of parliament adjourned deliberations and will reconvene at 9 a.m. in Prague tomorrow, when Necas will attend, parliamentary head Miroslava Nemcova said in a statement. 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.

The country should move toward early elections as soon as possible, Social Democrat leader Bohuslav Sobotka told reporters in Prague today.

“With this scandal, Necas and the ODS lost any legitimacy to participate in the government,” Sobotka said. “The Social Democrats will do everything possible to make Necas’s government leave the office.”

President’s Meeting

President Milos Zeman, a critic of the government and a Social Democrat prime minister from 1998 to 2002, will meet with Necas and opposition leader Bohuslav Sobotka at the Prague castle tomorrow, his office said.

Police or prosecutors didn’t give any details about the investigation, leaving government and opposition lawmakers seeking information.

“I’m very upset,” Nemcova said on state television after the police news conference. “We didn’t get any information. The political scene and the people have been” hearing “since the morning that something extraordinary happened, and they have the right to know what happened.”

Finance Minister Miroslav Kalousek, the deputy leader of the junior coalition party TOP09, said there was “no reason to lose confidence” in Necas and destabilize the government.

“We are at the crossroad for the development of democracy in our republic,” Karel Schwarzenberg, TOP09 leader and foreign minister, told reporters. “Either the police has real evidence of something illegal and then what happened in the past hours may lead to a revival of our democracy. Or, god forbid, there is no evidence, then this would be a threat to our democracy.”

To contact the reporters on this story: Peter Laca in Prague at placa@bloomberg.net; Krystof Chamonikolas in Prague at kchamonikola@bloomberg.net

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

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