June 20 (Bloomberg) -- The Czech Civic Democratic Party is seeking majority support for Parliament Speaker Miroslava Nemcova, its candidate for premier, after a scandal over illegal spying and bribery charges toppled the Cabinet of Petr Necas.
Nemcova, 60, needs approval from two junior coalition parties, President Milos Zeman and the parliament’s confirmation to become the Czech Republic’s first female prime minister. Zeman, who has the right to name the next head of the Cabinet, won’t automatically accept any nomination and early elections remain a possibility, he said before the largest ruling party announced its candidate.
The parties that formed Necas’s three-way coalition are maneuvering to prevent an early election sought by the poll-leading opposition Social Democrats, who pledged higher taxes and more state spending to bring the $217 billion economy out of recession. The government has been hemorrhaging popularity as it pursued austerity policies that hurt household spending while helping cut borrowing costs to record lows.
“The decision wasn’t an easy one for me and I’m fully aware of the critical, difficult situation of the Czech Republic,” Nemcova told reporters in Prague late yesterday. “It’s a first step. The positive fact is that we found a solution quickly, that we were unanimous.”
Nemcova has been a member of the Civic Democratic Party since 1992 and a lawmaker since 1998, according to her biography on the party’s website. She worked as an officer at the Czech Statistics Office between 1972 and 1992, when she founded a bookstore that she owned until 2007.
While the European Union’s second largest ex-communist economy is enduring a record-long contraction, Necas credits his austerity policies with cutting the yield on the government’s 10-year koruna debt to an all-time low of 1.48 percent on May 17, according to data compiled by Bloomberg. The yield has risen 13 basis points since the current crisis started, to 2.19 percent today, holding below comparable U.S. Treasuries.
Nemcova headed the lower house of parliament since Necas took power in 2010 and backed all his major bills. If confirmed as prime minister, she would follow Slovenia’s Alenka Bratusek who rose to the premiership in March after a corruption probe sank the Cabinet of her predecessor.
Bratusek also took power amid political uncertainty, with an economy in recession and what the Organization for Economic Cooperation and Development called a “severe banking crisis.”
The Czech Republic’s political turmoil erupted June 13 after nighttime police raids resulted in the detention of eight people including the head of the premier’s office. Zeman, the Czech Republic’s first directly elected head of state, became a leading figure in shaping the future government after the scandal forced Necas resign on June 17.
Zeman will meet the leaders of political parties starting June 21, while Necas remains as caretaker prime minister until his successor is named.
There are arguments for and against early elections and the president has several options, which include accepting a candidate who will demonstrate a majority support in the lower house of parliament, according to Zeman.
While junior coalition party TOP09 respects Nemcova as a politician, it will debate her nomination with the Civic Democrats as her departure from the parliamentary post would make it difficult to replace her, Deputy Chairman Miroslav Kalousek said on state television yesterday.
The current coalition, which controls 98 seats in the 200-member parliament, needs to secure a simple majority in the assembly to install a new government. It has relied on the votes of former coalition deputies who defected their parties to pass legislation.
The Social Democrats, led by Bohuslav Sobotka, promised to raise some income taxes to pay for higher spending the party says is needed to revive the economy. Sobotka may need to rely on the Communist Party to pass some bills if he doesn’t win an outright majority in parliament or fails to find other coalition partners.
Jana Nagyova, then the head of Necas’s office, was among eight officials detained after police raids last week.
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. She rejects the charges of abuse of power and will appeal the court decision to keep her in custody, her lawyer Eduard Bruna said.
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