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Czech parties edge closer to government deal
Tue Mar 31, 2009 10:36am EDT
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By Robert Mueller
PRAGUE (Reuters) - Outgoing Czech Prime Minister Mirek Topolanek agreed Tuesday to an opposition demand for a new government of non-politicians that would lead the country to an early election.
He dropped a demand to stay on as premier, and the main opposition leader said he now hoped for a final deal this week.
"In the name of reaching wide political consensus we are ready for the creation of a cabinet of non-partisans, with the support of all democratic parties," Topolanek told a news conference.
The Czech Republic has been in political turmoil since a no-confidence vote last week toppled his minority center-right government.
Its collapse has undermined the country's position as the holder of the rotating EU presidency, strengthened the role of Eurosceptic President Vaclav Klaus and raised doubts about ratification of the EU's Lisbon treaty.
Opposition leftist Social Democrat chief Jiri Paroubek was optimistic on a deal. Asked if the parties had moved closer to an agreement, he said:
"I think so ... If there is continuity in the negotiations from the government parties, then the Social Democrats are interested in a very quick solution, by the end of this week," he told reporters.
With neither the outgoing coalition nor the leftist opposition commanding a majority in parliament, an agreement is needed to form a viable new cabinet.
Paroubek said a new cabinet may be installed within weeks, still during the Czechs' EU presidency which runs until June.
Topolanek said there were other options -- his cabinet could leave in early May at the earliest, after the parliament approves measures to fight the economic downturn, but it could also last until the early election.
The crown currency firmed after Paroubek's statement, and traded at 27.335 to the euro at 1345 GMT from 27.460 ahead of the news.
The Czech political crisis is the result of personal rivalries and defections from the government camp over the past months and has less to do with the global financial crisis that fell governments in Hungary and Latvia.
The country has seen a drop of more than a fifth in industrial output and exports, but its banks have been stable and the currency recovered from losses seen earlier this year, thanks to low overall debt and low exposure to foreign credit.
Showing a willingness to cooperate, the Social Democrats and Topolanek's right-wing Civic Democrats were in talks Tuesday on a compromise on tax cuts and other measures to help ease the impact of the global economic crisis.
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