Czech Republic: Second Victim of Worldwide Credit Crunch

ummmm this is huge news.... the czech republic is much more populated than iceland, whose government already failed due to the worldwide credit crunch. ---brandon

Czech Government Ousted For First Time In History; Another Economic Casualty


KAREL JANICEK | March 24, 2009 04:51 PM EST | AP


Czech Prime Minister Mirek Topolanek reacts after the Czech Chamber of Deputies expressed no confidence in the center-right government in Prague, the Czech Republic, on Tuesday, March 24, 2009. The Czech Republic's three-party coalition government has lost a parliamentary no confidence vote, partly due to its handling of the economic crisis, and must step down. In the 200-seat lower house, 101 lawmakers, the minimum needed, voted Tuesday to oust the government. (AP Photo/CTK, Roman Vondrous)

PRAGUE — The Czech government collapsed Tuesday after losing a parliamentary no-confidence vote over its handling of the economic crisis.

It was a huge embarrassment for Prime Minister Mirek Topolanek, coming just days before a planned visit by President Barack Obama and midway through the Czech Republic's six-month European Union presidency.

The lower house of Parliament voted 101-96 to declare no confidence in the three-party coalition government, after four lawmakers broke rank with their parties and voted with the opposition. Three legislators were absent from the vote.

It was the first time a government has been ousted by parliament since the country came to existence after the 1993 split of Czechoslovakia.

Topolanek said he could resign after a planned trip to Brussels on Wednesday. "I take the vote into account and will act according to the Constitution," he said.

There has been no indication of whom President Vaclav Klaus might choose to form a new Cabinet. If three attempts to form a government fail, early elections must be called.

Topolanek's minority coalition took charge in January 2007, after months of difficult negotiations following 2006 general elections that resulted in no clear winner.

The government has struggled to resolve deep divisions within Parliament over whether to allow components of a U.S. missile defense shield on Czech territory, and whether to adopt the EU reform treaty to streamline decision-making in the bloc.

In recent months, opposition lawmakers also said they became frustrated with the government's response to the global economic slowdown. Before the crisis, the Czech Republic's export-oriented economy had been growing fast, but the country is expected to enter a recession this year. Annual industrial output fell 23.3 percent in January.

The opposition said the government acted too late and did too little _ approving a stimulus package only last month worth 70 billion koruna ($3.5 billion), including measures for investments in ecology and infrastructure along with tax cuts and loan guarantees.

"The government got what it deserved," said former Prime Minister Jiri Paroubek, who leads the opposition Social Democratic party. "It was not able to handle the affects of the economic crisis." Paroubek said, however, that he was not against Topolanek's government staying in office until the end of the Czech term leading the EU presidency.

The European Union executive said it trusted the Czech Republic would be able to continue its duties in the EU presidency.

"It is for the Czech Republic's democratic process under the constitution to resolve the domestic political issues; the Commission is confident that this is done in a way which ensures the full functioning of the Council Presidency," the European Commission said in a statement.

Meanwhile, it will likely be left to a new government to deal with the two other main issues in Czech Parliament _ the proposed U.S. missile defense project and the EU reform treaty.

The Czech Parliament's lower house has passed the so-called Lisbon Treaty, but the upper house _ controlled by Topolanek's own Euro-skeptic party _ has yet to vote on it. All 27 EU nations must approve the treaty for it to take effect.

The government's deal to allow a U.S. radar base near Prague is also up in the air. Topolanek was forced last week to withdraw legislation on the U.S. missile defense plan from lower house because he did not have enough votes to ensure it would pass.

The missile defense shield was likely to be high on the agenda during Obama's visit April 4-5 to Prague. Obama has never said if the U.S. will go ahead with the deal, brokered under President George W. Bush.

The opposition has argued against the missile defense plan because it could anger Russia, which has vehemently opposed the missile shield within its former sphere of influence. Washington has said the shield, also including 10 interceptor missiles to be housed in neighboring Poland, would protect Europe from attacks by "rogue states" in the Middle East.

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