Czech parties sign coalition agreement

The victorious Czech Social Democrats and two smaller parties, the Christian Democrats and the Freedom Union, have signed an agreement on a coalition government that is due to take office on 15 July.

The government coalition will have a small majority in the Czech Parliament. The Social Democrats gained 70 seats, and the centrist Christian Democrats 23 and the right wing Freedom Union 8 out of 200 seats in Parliament.

That will be the second term in office for the Social Democrats who dominate the government coalition, especially in the area of the economy and social issues.

The Christian Democrats and the Freedom Union will each have three ministries in the 17-member government.

The coalition partners have already agreed that they would aim to bring the budget deficit into the range of 4.9 to 5.4 per cent of GDP in 2006. That means that the Czech Republic will not be able to qualify for membership of the euro-zone two years after its accession to the EU, foreseen in 2004. A budget deficit below 3 per cent of GDP is required to adopt the euro. Mr Spidla said the country should adopt the euro in 2008, under the next government, to give the current government more time to restructure public finances.


The Socialists, who have led the Czech Government for the last four years, have won the 14-15 June elections with 30 per cent of the vote. Their main rivals, the conservative Civic Democrats, won 25 per cent of the vote. The Communists were third with 18 per cent, and the Centrist Coalition fourth with 14 per cent. No other party won enough votes to enter the Parliament.

For the last four years, the Czech Republic was governed by a coalition of the Social Democratic Party, the biggest parliamentary party, and the Civic Democratic Party, the second biggest parliamentary party. The two parties co-operated on the basis of an agreement on "support without participation". The Civic Democratic Party leader, Vaclav Klaus, became the Speaker of the Parliament under this agreement.


The new Government's main task will be to bring the Czech Republic into the EU. The victory of the pro-European Socialists will ensure that Prague remains a keen supporter of EU membership. The new Government is also expected to speed up economic reforms and fight widespread corruption.


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