By Tatiana Jancarikova
BRATISLAVA (Reuters) - Slovakia's ruling leftist party Smer and three small centrist and nationalist partners have drafted a coalition agreement and a new government could be installed by the middle of next week, Prime Minister Robert Fico said on Thursday.
Fico's party won the most votes in the March 5 election but lost its overall majority, threatening instability before Bratislava takes over the rotating presidency of the crisis-ridden European Union in the second half of this year.
But Fico moved fast to cobble together a majority and said the coalition pact could be finalised in the coming days with the new cabinet, his third in a decade, sworn in next Wednesday or Thursday.
The four parties earlier this week agreed policy targets and an allocation of portfolios in the euro zone and NATO country's future government.
"We drafted the pillars of the coalition agreement today... We hope our efforts will lead to a stable and functional government and parliament because a demanding EU presidency is ahead of us," Fico told reporters.
Slovakia's EU presidency will give the strongly anti-immigration Fico a bigger voice on issues from the 28-nation bloc's refugee crisis to the aftermath of Britain's June 23 referendum on leaving the EU.
The new cabinet will maintain a strict line against admitting migrants, more than 1.1 million of whom have poured into the EU since the start of last year.
Three of the four coalition partners said before the March 5 vote they would oppose dropping the last government's lawsuit against a plan approved by a majority of EU leaders to share out 160,000 asylum seekers among member states.
Fico's Smer party won 49 of the 150 seats in parliament, down from 83 it had in the past four years, and seemed at risk of losing power.
Fico's party will be dominant in the coalition and hold key ministries such as finance, interior and foreign affairs.
Government sources said the finance ministry is almost certain to be run again by Peter Kazimir, respected for keeping budget deficits under control and known for his tough stance in the euro zone's negotiations with debt-plagued Greece.
The coalition plans moderate cuts in taxes for corporates and small entrepreneurs, and a balanced budget by the end of its term in 2020. It has also agreed to tackle shortcomings in healthcare and education and increase transparency in government and public spending after a series of corruption scandals.
(Writing by Jason Hovet; Editing by Mark Heinrich)