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Czech President Swears In Cabinet in Showdown with Parliament

  • Reuters

Czech President Milos Zeman, April 3, 2013.

Czech President Milos Zeman, April 3, 2013.

Czech President Milos Zeman swore in a cabinet led by a longtime ally on Wednesday that faces almost certain rejection by parties in parliament, raising the prospect of prolonged political uncertainty in the central European nation.

The leftist president confirmed economist Jiri Rusnok as prime minister, hoping that he can pull the Czech economy out of a recession now into its second year and lead the country into an election due next year.

But the cabinet is likely to lose a vote of confidence, due within 30 days, as Rusnok's appointment has infuriated both the three parties of the outgoing center-right coalition and the leftist opposition, who all view it as a power grab by Zeman.

Rusnok, who served as finance minister in a Zeman-led cabinet a decade ago, replaces Petr Necas, who resigned last month after a close aide was charged with bribery and abuse of office. Prosecutors have asked parliament to lift the center-right former premier's parliamentary immunity.

If Rusnok loses the parliamentary vote of confidence, Zeman is meant to appoint another prime minister. But there are no time limits and politicians fear Zeman could drag out the process, leaving Rusnok's team in place for many months to carry out the president's wishes.

Such a course would increase the risk of gridlock in policymaking which could hold up a 2014 budget plan and rattle investors, who have long viewed the Czech Republic as a safe haven among emerging economies.

Rusnok's new cabinet includes several people who have worked as advisers to Zeman and former members of the opposition Social Democratic party, which Zeman led until 2002.

For finance minister, Rusnok picked Jan Fischer, a former prime minister in a technocrat cabinet in 2009-10.

The Czech budget deficit is set to fall below the EU-prescribed limit of 3 percent of economic output this year.

But the budget-cutting drive of the center-right coalition in power from 2010 until last month has pushed the Czech economy into its longest recession in two decades.

Fischer and Rusnok have said that returning the country to growth is a top priority for the new government.