Czech president to name new centre-left cabinet on January 29

Reuters News
Posted: Jan 23, 2014 8:26 AM

PRAGUE (Reuters) - Czech President Milos Zeman will name the members of a center-left cabinet to be led by incoming Prime Minister Bohuslav Sobotka on January 29, his office said on Thursday.

Zeman appointed Sobotka on January 17, opening the way for a new government to take over from a caretaker cabinet that has ruled for the past half year, paralysing policymaking as the economy looks to recover from recession.

Sobotka and his Social Democrats have built a coalition with centrist anti-graft movement ANO and the Christian Democrats.

The coalition plans to put less emphasis on budget consolidation than the previous government which had aimed to eliminate the deficit.

Sobotka has said he will boost the economy by reversing what he has called a "deadly spiral" of austerity measures - including cuts in spending and welfare - of the former center-right government, which collapsed under allegations of bribery and illegal surveillance last June.

The 42-year-old trained lawyer and former finance minister wants to raise pensions and the minimum wage and keep the budget deficit below 3 percent of gross domestic product as economic recovery takes hold after a recession in 2012-2013.

Sobotka also favours joining the EU's "fiscal compact" treaty on budget policy, accepted by all EU governments except the last Czech cabinet and Britain.

But the Social Democrats, who narrowly won an early election in October, will have trouble pushing their spending plans, limited by ANO, which surged to second place in the poll.

Sobotka may be also hampered by poor relations with Zeman, a former Social Democrat prime minister estranged from the party after a rift in 2003.

Zeman appointed Prime Minister Jiri Rusnok last year against the will of the biggest political parties but the cabinet failed to win a confidence vote in parliament, leading to the early election.

(Reporting by Jason Hovet; Editing by Robin Pomeroy)