Milos Zeman. Photo Reuters
President Milos Zeman has appointed a new centre-left
cabinet, ending a seven-month power vacuum that has hampered
policy decisions that the Czech Republic needs to boost
recovery from its longest recession.
Zeman appointed ministers from three coalition parties who
formed a parliamentary majority after an early election in
The coalition, led by Prime Minister Bohuslav Sobotka, plans
to ease some fiscal restrictions imposed by the former
centre-right cabinet, bring the country closer to the euro
zone and clampdown on corruption - the election's main theme.
"I am convinced this government will bring the economic
growth, prosperity and the stability (the country) needs,"
Sobotka said after the appointment ceremony. "We want to
pursue a socially sensible and just policy."
Sobotka takes over from a caretaker administration that has
governed since a centre-right cabinet collapsed in a sleaze
scandal last June.
Social Democrat leader Sobotka, 42, wants to return the
central European country to the EU mainstream in contrast to
the eurosceptic course of previous cabinets. He aims to bring
the country closer to euro zone entry, although the coalition
has been vague on any timing.
"Hopes are rising after a long time that the Czech Republic
will stop playing the role of troublemaker in the European
Union," Jakub Janda from the European Values think-tank wrote
in a commentary.
The Social Democrats aim to raise taxes, below the EU average
but higher than in most new EU member states at around 35
percent of gross domestic product, to fund increases in
wages, pensions and welfare.
They plan to run budget deficits under the EU's 3 percent
limit, abandoning previous aims to eliminate deficit funding
and halt growth of debt, low by European standards at around
46 percent of GDP.
The budget will benefit from a gradual recovery from a
recession that started in 2011 and ended last year and which
was in part caused by the austerity policies of the previous
Any tax hikes, however, will be opposed by the ANO party led
by Finance Minister Andrej Babis, a billionaire businessman
who owns hundreds of firms in the food, chemical and media
industries. Debate over taxes is the most likely flashpoint
for the centre-left coalition in the months ahead.
The centre-right opposition criticises Babis - likened by the
media to Italy's Silvio Berlusconi - for conflicts of
interest he may face as the head of tax and regulatory
Sobotka, a soft-spoken lawyer and career politician, may also
be hampered by conflicts with President Zeman, a long-time
adversary. Zeman, a former leader of Sobotka's party, has
little say in the day-to-day running of the country but has a
role in foreign policy and the appointments of central
bankers, ambassadors and judges.
Zeman had said he had objections against some of ministers,
but in the end appointed all candidates proposed by Sobotka.
The government plans to join the EU's budget stability pact,
which the previous centre-right cabinet refused to sign, as
the only EU member country apart from Britain.
The cabinet will also need to tackle widespread corruption, a
major concern for voters and the main campaign call of Babies
centrist ANO party. ANO has already proposed a series of laws
aimed at increasing transparency in public contracts.