Czech Co-Ruling Party Demands to Join EU’s Fiscal Pact

TOP09, a Czech ruling-coalition party, demanded the country join the European Union’s fiscal compact this year, setting up a clash with Premier Petr Necas, who opposes the move.

The three ruling parties are negotiating a new coalition pact after the administration lost its parliamentary majority last year when the smallest party splintered. The U.K. and the Czech Republic were the only EU members not to sign the fiscal treaty in March, which stiffened budget rules meant to stabilize the euro.

TOP09 “will demand the coalition agreement” between the three parties “include a government commitment to join this agreement on the EU level already in 2013,” the party said in a statement posted on its website in Prague today.

The Czech government is refusing to set a target date for euro adoption and opposes efforts for closer financial integration within the bloc. The country didn’t have to bail out any of its lenders, mostly owned by western banks, during the global financial crisis and the government says it wants to prevent outflow of domestic deposits abroad.

Coalition leaders will debate TOP09’s fiscal-compact demand, Necas said in an e-mailed statement today.

“I believe that it isn’t meant to spark a dispute about this issue within the coalition in light of the result of presidential elections,” Necas said.

Karel Schwarzenberg, TOP09 chairman and the foreign minister, finished second in the Czech Republic’s first direct presidential election after a surprise advance to the run-off round on Jan. 25-26.

Necas also reiterated that he wants the country to hold a referendum on joining the euro area. The Czech Republic committed to adopting the single currency when it joined the EU together with seven other post-communist nations in 2004.

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